ALB Limited 09.09.2020
Chart of the Day EUR/USD 09.09.2020
The euro has indeed been falling for six consecutive sessions—from the top of a short-term rising channel since August, complementing the long-term ascending channel, supported by the 50 DMA in place since the May lows. In other words, notwithstanding the number of sessions during which the single currency has dropped, it still fits well within the uptrending pattern.
The ECB is concerned about the rising euro as they try to stoke economic growth in the eurozone after lockdowns, which were meant to slow the spread of COVID-19 in Europe. The euro’s current strengthening is expected to trigger another cut in the central bank’s inflation forecast, lowering the ECB’s target, which is now just under 2 percent.
However, the ECB plays second fiddle to the all-powerful Federal Reserve, which is trying desperately to reignite the world’s largest economy which has also been hammered by coronavirus lockdowns, via aggressive stimulus measures, upending the Fed’s decades-long inflation policy, and in the process deliberately weakening the US dollar.
