The euro is rising during early Wednesday trading, as positive sentiment is inundating markets. Yesterday, a Fed official hinted at the possibility of even more flexibility being needed in the American monetary policy. This was music to the ears of investors, meaning the Fed has no plans to change strategy in its unparalleled support to the economy.
There have also been reports of successful tests for a coronavirus vaccine, which further enhanced global appetite for risk. Among the leading currencies the euro is benefiting the most from this optimistic mood, hitting its highest level in four months versus the dollar. If the upcoming EU summit of leaders manages to deliver an agreement on the much-anticipated European recovery fund, there will be scope for further upsides for the single currency.
Ricardo Evangelista – Senior Analyst, ActivTrades
“Risk on” continues to dominate markets yet despite this, the gold price is holding above $1,800, confirming the high investor interest for bullion. Technically, nothing seems to have changed with a first support zone at $1,790-$1,795 and a resistance level at $1,815. The positive correlation of the last few months between gold and stock markets movement is related to the fact that investors are increasing their share of stocks in their portfolio but at the same time want to have insurance in case of further market corrections and gold seems to be the perfect asset to play this role.
Carlo Alberto De Casa – Chief analyst, ActivTrades