The growth of the dollar against the euro is temporary


The dollar, which has experienced strong selling pressure in recent months amid demand for shares, has shown impressive performance in recent days, rebounding from multi-year lows reached earlier this year. According to the US Commodity Futures Trading Commission CFTC, speculators’ rate on the weakening of the US dollar fell to a 7-week low.

Is the dollar weakness over? If you buy the dollar, in which currency pairs will it be most profitable? AMarkets experts answered the question of Fortrader magazine.

– The growth of the dollar, which was observed last week, was a temporary phenomenon. Buyers have taken advantage of the US congressional hesitation with the introduction of new fiscal stimulus measures in the US, and also received support from several strong fundamental reports in the states.

However, on Friday following the release of nonfarm payroll’s labor market data, it became clear that the pace of the US economic recovery is far from what optimists would like to see. The disastrous employment release helped sellers re-seize the initiative from buyers and, according to many experts, could be a decisive argument for Republicans to give the green light to a massive $ 1.9 trillion fiscal aid program.

Traders believe that a final decision on the new incentives could be made before the end of this month. As soon as that happens, another shot of liquidity, as well as the subsequent inflation risks, will send the dollar to the lows of the end of last year rather quickly.

Euro to dollar rate

In such conditions, you need to stay away from buying the dollar, or even better capitalize on its potential weakness by buying EUR / USD with a target at 1.25 and GBP / USD at 1.40.

Libertex [CPS] WW

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