The most widely traded currency pair EUR/USD is dealing in an uptrend channel. The Federal Reserve Predicts that the economy of USA is going to contract about 6.5% by the end of 2020. It is going to rise about 5% in 2021 and about 3.5% in 2022. The interest rate is not going to expected to rise by the end of 2022. At the same time, the unemployment rate is going to be about 9.3% by the end of 2020 and 6.5% in the next year and 5.5% in 2022.
The Federal Reserve continues to support the USD and EUR/USD falls as compared to USD. USD continues to enjoy a stronger position after the disappointing months of the havoc played by pandemic. However this change in market condition cannot be considered preliminary to an absolute and general change in the trade, as the traders are still not ready to combat risk. The traders are still in favor of EUR and expecting a stronger EUR as compared to USD.
GBP/USD declined 0.6% amid risk of reversible of Brexit
The news of a second wave of pandemic cannot be ignored as well. Obviously you can expect more changes in the market conditions accordingly. Michel Bernier, the chief Negotiator of EU has also shed light about this issue. He slammed UK for‘cherry picking’ the most important and beneficial parts of the single market of European Union. He has used the phrase ‘Cherry Picking’ to elaborate the situation.
Cherry picking means the practice of taking the most profitable things or deals out of all available items. He informed the advisory body of European Union that British Negotiators are not showing cooperation in four basic spheres which are vital and compulsory for establishing an equal and relationship and these spheres include fisheries, judiciary, governance and fair competition. Thus it does not provide safeguard to guarantee air competition.
The change in the value of the most active currency pair EUR/USD is also evident in the value of other currency pairs having one of them such as GBP/USD suffers a decline by 0.6% and EUR/GBP enjoys a rise by 0.5%.