Good day forex traders.
It is the mid week and I hope you are making green pips! Do be reminded that the US Non-Farm Payroll will be released this Friday. Increased volatility and unexpected spikes may happen as employment figures may bring insights to the US economy.
In a fundamental analysis write up, econotimes reported that Scotiabank sees the possibility of the EUR/USD hitting 1.02.
” The EUR/USD pair is expected to hit 1.02 level in the next few months. However, the EUR rallied through the start of the year on short-covering. Higher inflation, driven in part by rising fuel costs, prompted market expectations that the European Central Bank (ECB) may start to taper its asset purchase programme later this year, Scotiabank reported.
Core Eurozone 10-year bond yields rose to 0.5 percent through the end of January and short-term yield spreads versus the USD compressed, driving EUR/USD pair to the 1.08 area.
Core yields have eased again and short-term rates have declined significantly in the past few weeks as investors have moved out of weaker, peripheral bond markets as well are larger, core markets (France) amid rising investor worries that the results of key elections (The Netherlands, France and Germany) over the course of the next few months could further destabilize the EUR project. ”
I mentioned before that investors are generally adverse to political situations. It is not impossible that the euro currency may see slower demand for the time being in view of the upcoming key elections. Close monitoring is required as usual.