The US dollar continued to remain declining against the Europe’s single currency on Wednesday, November 25. So, since September of this year, the EUR/USD currency pair has pushed above $1.19 level and rose by 0.18 percent to trade at 1.1916. The DXY index has decreased by -0.3% to a level of 91.92, the lowest level in the last two months.
The positive outcomes of three vaccine studies revealed in November appear to have a positive effect on worldwide demand for risky assets. However, there is still no hope of a short-term solution to the problems, as even though the vaccine is registered, the population’s mass vaccination and the creation of immunity can only give results by the summer of 2021.
Moreover the number of COVID-19 cases in the world has surpassed 60 million, according to Johns Hopkins University, of which 12.7 are in the United States. It should be noted, in turn, that a number of Western nations are preparing to relax quarantine measures. Thus on television, French President Emmanuel Macron said that the peak of the second wave of the COVID-19 pandemic in France had passed, and that improving indicators would allow the lockdowns to gradually ease up.
The change of market players to risky assets was also affected by the announcement of current President Donald Trump about the start of the process of shifting power to the Democrats. Trump says, however, that he will, as previously intended, continue to fight for votes in court. Moreover, this week’s weakening of the dollar was motivated by the potential appointment of former Fed Chair Janet Yellen as the new Treasury Secretary of the US. In order to improve the pandemic-hit U.S. economy, Yellen called for more government spending.
As for the recently published macroeconomic indicators, in the third quarter, US GDP grew by a record 33.1 percent q/q. The data also showed 778,000 unemployment compensation applications over the past week which is higher than the 730,000 applications and 748,000 applications filed in the previous week’s forecast. It should be noted that analysts expect in the near future a potential gloomy development of the unemployment situation in the United States against the backdrop of an ongoing pandemic.