- ECB comments worry EUR bulls.
- Pandemic assists dollar pullback.
- Trump and Biden to debate later today.
EUR/USD started the week with a modest bounce from its two-month lows helped by the greenback’s weakness. Better than expected Chinese data and the positive developments in the US fiscal-stimulus bill, over the weekend, supported the global risk appetite. The pair was trading below 1.1700.
The risk-on mood worked against the appeal of the US dollar as a haven-linked currency. But, the EUR/USD couldn’t benefit substantially from the mood change as the rising cases of coronavirus in Europe put a lid on the optimism. Also, the comments from the European Central Bank President Christine Lagarde regarding the euro appreciation against major competitors and its impact on the domestic inflation hurt the sentiments. She stated that the policymakers would continue to watch the currency movements.
The surge in coronavirus cases and the US political scene put brakes to the US dollar fall. The market is worried about a smooth transfer of power if Trump loses the November elections. So, the first presidential debate, scheduled for later today, will be keenly followed by the traders. The major will also await the US monthly job numbers this week and the fiscal stimulus bill’s developments. Europe will have a light economic docket, and hence the trading action in the pair will be subdued ahead of the critical events.
Today, the US session has speeches by the FOMC members and the Conference Board’s Consumer Confidence Index to drive the market action.