(26 MAY 2020)DAILY MARKET BRIEF 2:dollar Down on improved risk appetite

<p>Released this morning, the Gfk German consumer climate printed a slightly lower figure than expected in June, but the kneejerk retreat in the euro remained almost imperceptible. The single currency is capable of pulling out 1.0932, the 100-day moving average resistance, but the battle against the 1.10 offers will be fierce, as the 200-day moving average has been a solid trigger for sellers since March. Furthermore, the euro is a less preferred refuge for risk averse investors, especially given the controversies at the heart of the EU regarding the size and the form of a fiscal stimulus package targeting the coronavirus-led economic slowdown, and the European Central Bank’s (ECB) potentially diminished firepower to act as a safety net if things don’t work out well with the ‘frugal four’. The single currency should remain fragile prior to the 1.10 mark before the ECB’s Financial Stability review today and Christine Lagarde’s speech on Wednesday.
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