In the morning of the Asian market on Friday (December 30), the euro jumped against the US dollar in the short term, breaking through the 1.05 and 1.06 marks, with a high of 1.0649, setting a new high since December 15. Currently, the exchange rate has given up most of the increase, and trading was around 1.0568.
Why does the euro perform so strongly in a light market? According to the analysis of forex trader in the Asian market, the sharp rise of the euro/dollar is due to a significant increase in the program buying order after the exchange rate broke through 1.0500 in the early trading. As some traders take New Year's leave, the US dollar takes the opportunity to cover the long positions and boost the euro higher.
After the Fed raised interest rates in December, the topic of hype about the Fed's interest rate hike has been in the market for a long time, and these hypes also have a need to cover them. As trading was light during the New Year holiday, investors were backing the long positions in the US dollar. In the morning of today's trading, the US dollar index once plunged for nearly 100 points, hitting a low of 101.54 in the past two weeks, and rebounded nearly 60 points, trading at the 102.14 line.
The economic data released by the United States on Thursday did not bring much support to the US dollar. Data shows that the number of people applying for unemployment benefits in the United States for the first time in December 24 was 265,000, expected to be 265,000, and the previous value was 275,000. The monthly rate of wholesale inventory in the United States in November was 0.9%, expected to be 0.2%, and the previous value was -0.1%.
The weekly uptrend of the euro against the dollar began on Wednesday with a sharp decline in U.S. stocks . Investors are doubtful about the valuation of US stocks after the big rise, and the rise in risk aversion sentiment has limited the rise of the US dollar and pushed the euro up.
After the US stock market rose continuously, investors' doubts about the excessive valuation of US stocks increased, causing US stocks to fall sharply this week. U.S. stock closing data on Thursday showed that Dow Jones Index fell 0.05% at 19,825, while Nasdaq fell 0.25%. In the bond market, yields have little change. 10 years fell to a new weekly low of 2.472%.
In addition, the easing of concerns about the Italian banking industry has also boosted the euro against the dollar. It was reported on Thursday that Italy received EU approval to extend bank liquidity projects. The EU agreed to Italy extend its banking liquidity project until June 30.
Seana Bank has been approved by the EU and will receive emergency assistance from the Italian government. The EU also approved liquidity support for Bank of Seajana. Currently, the EU is working with Italy to evaluate the proposed intervention in the Bank of Seajana.
