Euro Climbs Against Dollar amidst US Data Blackout
Recovering from recent price depreciation, Euro US dollar or EURUSD pair climbed on Friday to $1.1567, a key long-term support level. The US dollar weakened against the single currency amidst heated debate over Fed rate cut in December.
The Federal Reserve’s latest statement offered little in the way of dovish conviction — policymakers stopped short of committing to another rate cut this year.
It dicey what the Fed plans to do after concern raised by Federal Open Market Committee and Jerome Powell hawkish laced tone.
Traded favourable for most part of the week, the dollar index currently sits around 99.63, having strengthened slightly but remaining below the psychological 100 mark.
The rally has been significant despite ongoing US government shutdown, which has created an economic blackout, delaying key data and leaving investors guessing about the true health of the economy.
Estimates of the economic impact range from $7 billion to $16 billion per week, with the White House’s Council of Economic Advisers, a U.S. government agency, forecasting a weekly loss of $15 billion.
The euro lost roughly 1.7% in October, snapping its late-summer rally but still up more than 11% year-to-date. With uncertainty surrounding the government shutdown and limited macro releases, traders are likely to maintain a defensive stance.
FX traders will be using short-term rallies to adjust exposure until clearer labour and inflation signals emerge. Fidelity Bank: Analysts See 84% Upside on New Target Price
