Market Analysis

The euro looks set for weekly losses against the dollar and the pound

 

FOREX

The euro is on the back foot in relation to other major currencies during early Friday trading. The single currency looks set for weekly losses of more than 1% against the US dollar and almost 1.5% to the pound, as the differential in market expectations regarding the timing for tightening policies, between the ECB and its pairs, continues to expand. The European Central Bank remains reluctant to set a firm timeline for starting to hike rates, while investors look on with apprehension as a fourth wave of COVID threatens to engulf the continent; a scenario that is likely to create scope for further single currency downside.

Ricardo Evangelista – Senior Analyst, ActivTrades

 

Source: ActivTrader

 

OIL

WTI crude oil prices rose during early Friday trading, signalling the apparent indifference of investors toward reports of a potential coordinated tapping into strategic oil reserves by the US, China and other major economies. As demand keeps growing, the markets appear to have already priced-in the extra influx from the US and other strategic stocks, meaning unless OPEC+ hikes production to meet requirements there will be scope for further upside in the price of the barrel.

Ricardo Evangelista – Senior Analyst, ActivTrades

 

Source: ActivTrader

 

EUROPEAN SHARES 
Shares peaked higher in Europe for the last trading session of the week, with all benchmarks in the green alongside Asian stocks and US futures contracts. The “risk-on” mood lingers everywhere despite the dark clouds brought by the fear of an accelerated hawkish switch from the Federal Reserve. While investors hedge their portfolio buying US dollars, they still tend to think the party isn’t over on riskier assets such as stocks, as long as the Fed keeps on printing. This situation is especially true on the old continent as the ECB – not under as much pressure as the Fed – hasn’t announced anything regarding a change in policy. Without an end in sight for these extremely dovish conditions, investors are likely to keep driving stock prices higher, in the short to mid-term basis at least. The best performances come from Paris and London with the FTSE-100 index trading slightly below 7,300 pts following a sharp rebound over the lower band of its mid-term bullish channel at 7,240 pts.

Pierre Veyret– Technical analyst, ActivTrades

 

Source: ActivTrader

 

 

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