Optimism over a landmark breakthrough in talks to conclude Sino-US trade war had prodded the investors to prob into riskier assets such as Australian dollar and crude oil, and as an aftermath, the Euro was lifted from a three-month-low above 1.13 region again on Monday, the 18th of February.
Besides, the euro had been stuck in a narrow trading range between 1.1213-1.1570 since the mid-October 2018, a break above its initial resistance at 1.1470 appears to be a million miles away amid downbeat eurozone forecast and excruciating data from multiple eurozone giants such as Germany, France and Italy.
Adding further strains, the Brexit still is clinging on to the Eurozone, as caustic corrosion. However, as several ECB members are in talks of adding new money into the market mostly through low-tax debt, the euro may have been able to hold on between 1.13 to 1.15 in a near-term outlook, multiple analysts commented following the reveal of ECB’s new financial stimulus.
Apart from that, after drooling into three-month-low on Friday (Feb. 15th), the euro’s recent recovery had largely been fueled by investors’ optimism on a practical conclusion of Sino-US trade conflict, which had evaporated roughly trillions from the global market since last May.
Adding a risk-on mood could continue for euro, a currency analyst at RBC capital markets, Adam Cole said, “Generally the mood is still quite positive on the outlook for trade. If anything, we would be running with it. You have a background of quite decent growth and a Fed that is putting rates on hold. ”