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#1 16-11-2020 18:11:34

johnedward
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From: Paris - France
Registered: 21-12-2009
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EUR/USD: news that will likely affect trading this week

EUR/USD: news that will likely affect trading this week


The coming week is likely to be dominated by news of the virus situation. As the latest wave hits the United States, the number of infections is reaching extreme levels: more than 149,000 cases were reported in a single day over this last weekend.

The evolution of the virus situation is an important factor to take into account in any economic analysis, and the Western world has so far done a terrible job of containing the spread. If we look at other parts of the world, such as Australia, France and most Asian countries, the differences are appalling.

The ECB's Christine Lagarde again in the spotlight

Last week it was about the virtual Sintra event and the message that Lagarde, President of the ECB, sent to the markets. Many ECB observers consider last month's message and last week's message as the best of Lagarde's presidency to date. The easing continues at the end of the year and the euro is dealing with a strong central bank behind the crisis - hence the fact that it is trading in a tone of overbidding. With Lagarde speaking three times this week, the euro is expected to be one of the most volatile currencies.

Germany has begun preparing for a mass vaccination against the virus to speed up the process once a vaccine becomes available. Meanwhile, infection rates across Europe appear to have peaked but remain at high levels. The following months are therefore crucial, especially in view of the low temperatures during the winter season.

Another round of talks begins in Brussels this week, after the EU delegation visited London last week. It seems that both sides are desperately trying to reach an agreement, and this week could be the week when a breakthrough will be announced.

Retail sales data in the US and UK will give us a clue as to the shape of the consumer in both countries. With the holiday season approaching as well as Black Friday, the goal will be to see if the rate of savings has declined in light of the positive news about the virus vaccine.

Overall, the trading week should be quite active, with markets remaining tight at their highest levels. Dow Jones futures remain close to historical highs, as do the main risk pairs - EUR/USD is trading at $1.1849, AUD/USD has regained some ground and is now hovering around the $0.7316 level.

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