The euro resumed rising against the dollar regain the political risk of the week or around the Euro.
On Friday The euro continued the increases against the US dollar following the previous session, beginning from a multi-week low, continued to rise above the 1.230 mark. Market demand for the euro is still growing, promoting the exchange rate rose, the exchange rate hit an intraday high of 1.233, almost recover the declines of last week. As of now, the euro against the dollar traded at a price of 1.2317.
Anxieties over a triggered global trade war sustained tendency to sell the dollar following U.S. President Trump declared a high tariff on imported steel and aluminum, which seen as one of the key factors pushing the euro higher against the U.S. dollar.
Meanwhile, the global stock market sell-off further supported the position of the euro as a financing currency, boosting the EUR/USD continuation of the previous day’s trading momentum. The day before, the euro rebounded sharply against the dollar at a low of 1.2155 and hit a hundred points.
The current exchange rate of The euro against the dollar remained at 1.2320 the first recovery from this week’s decline. It may now be time to retest the 1.2540 resistance above the downturn in the U.S. economy. Although the US consumer sentiment index reached 99.7 in February, surpassing the previous forecast of 99.5, the euro as a whole still maintained its upward trend.
In the meantime, the upcoming ECB meeting will be the next major risk event for the euro. Next Thursday (March 8) the European Central Bank will announce the March interest rate decision, most likely to delete QE flexibility related terms, but only slightly support the euro, as the European monetary policy tone will be partial to the overall pigeon.
If expected to be realized, the move by the European Central Bank will be comparable to the situation in early June last year, when the ECB discarded the interest rate flexibility policy and the euro did not respond immediately. However, at the end of June, the market started to price the ECB normalization Monetary Policy.
Also, Italy will hold a national election this Sunday, the political risk may drag on the European Central Bank’s interest rate decision, and the German Social Democrats and the German Chancellor Merkel led the CDU to establish a ruling coalition will also vote on the same day.
Concerns over the global trade war triggered a sustained propensity to sell the dollar after U.S. President Trump announced a high tariff on imported steel and aluminum, which seen as one of the key factors pushing the euro higher against the U.S. dollar.
The euro is currently under pressure at 1.2332 against the dollar, if stabilized below the level above, then the short-term resistance to see the 1.2390-1.24 range, and finally the previous test high of 1.2550 near the test.
On the other hand, if the exchange rate fell again, the recent support at 1.220-1.2195 below the range, once again broken under the concern 1.215 can efficiently support.