The Euro has been under tremendous bearish pressure as the EUR/USD exchange rate fell to weekly lows around 1.1320. The currency pair has appreciably weakened, quickening to three-day lows. Sentiment is changing once again, this time in favor of the US Dollar. The movement comes amidst a slow convergence of all signals from key US economic indicators. At the same time, sentiment towards the Greenback indicates broad-based positive momentum.
Wednesday saw the EUR/USD exchange rate post further losses on the day, with US Dollar strength being the main driver. Analysts attribute this shift to recent economic data releases that, although varied, have contributed to a more positive outlook for the US economy. With this growing litany of discouraging conclusions for investors to consider, the Euro’s recent poor performance continues to weaken against its American counterpart.
Alongside this jump in currency markets, Gold has been pressured as well, trading at ~$3,300. The precious metal’s value has been further weighed down by easing US-China trade tensions, which have lowered safe-haven demand for Gold. As some of these geopolitical risks fade, investors seem increasingly hungry to take on riskier assets, which has played a role in Gold’s decline.
Gold was able to recapture the $3,300 level earlier this week but has had difficulty building off that momentum. The recent reduction in trade tensions between the United States and China has played a pivotal role in altering market dynamics. Without as much investor focus on big trade disruptions in the immediate future, demand for safe haven assets such as Gold has dried up.
As the day went on the EUR/USD became even weaker. This underlines the difficulty the Euro has been up against due to a stronger Dollar and the shifting market sentiment. On Friday, analysts will be watching to see what economic indicators are telling us. They will be looking at geopolitical developments that can affect investor sentiment and impact currency values.