The EUR/USD pair is trading above 1.1250 as the US dollar remains somewhat weaker.
On Monday, December 20, 2021, there will be forex news for European traders.
On Monday, the EUR/USD is trading in the positive region above 1.1250 as the greenback struggles to find demand as Omicron worries weigh on US Treasury bond yields. The US Dollar Index is down roughly 96.50 points, while the benchmark 10-year US Treasury bond rate is down more than 1%.
The Relative Strength Index (RSI) indicator on the daily chart rebound toward the 50 area after dipping below 30 late Friday, suggesting that the bearish pressure has lost strength since then.
After spending the first half of the day in a tight band around 1.1250, the EUR/USD gained traction and was last seen trading in positive territory around 1.1270. The pair, however, may struggle to extend its rebound because it is still at the mercy of the dollar’s market valuation.
The risk-averse market climate at the start of the week is dragging on US Treasury bond yields and preventing the currency from building on its remarkable gains from Friday. The benchmark 10-year US T-bond yield is down over 1.5 % on the day, and the US Dollar Index is down near 96.50, confirming the dollar’s mild decline.
With the central bank meetings behind us, risk perception took over as the key market driver at the start of the week. Investors are growing concerned that newly implemented Omicron-related limitations could harm global economic activity at a time when authorities in key nations are taking strong measures toward policy tightening.
Nonetheless, the eurozone appears to be getting closer to enacting stronger restrictions to slow the spread of the virus, while the US continues to oppose the notion of a full lockdown, implying that the common currency may become vulnerable versus the dollar.
Meanwhile, remarks from European Central Bank officials strengthen the assumption that the underlying outlook favors the dollar over the euro. Mario Centeno, a member of the European Central Bank’s (ECB) Governing Council, believed that COVID limits would raise inflation. Furthermore, ECB Governing Council member and Spanish central bank president Pablo Hernandez de Cos emphasized that a rate increase in 2022 was improbable.
The EUR/USD pair is staging a technical recovery after falling sharply on Friday and was last seen posting small daily gains at 1.1265. Modest dollar weakness during the European trading hours seems to be helping the pair edge higher ahead of the American session.
Market mood sours on Monday
The risk-averse market environment at the start of the week is causing US Treasury bond yields to push lower and making it difficult for the greenback to preserve its strength. The US Dollar Index was last seen losing 0.12% on a daily basis at 96.55.
- Australia’s ASX 200 index fell by -18.7 points (-0.26%) and currently trades at 7,285.30
- Japan’s Nikkei 225 index has fallen by -545.95 points (-1.91%) and currently trades at 27,999.73
- Hong Kong’s Hang Seng index has fallen by -334.13 points (-1.44%) and currently trades at 22,858.50
- China’s A50 Index has fallen by -76 points (-0.48%) and currently trades at 15,804.96
UK and Europe:
- UK’s FTSE 100 futures are currently down -101.5 points (-1.41%), the cash market is currently estimated to open at 7,168.42
- Euro STOXX 50 futures are currently down -71 points (-1.71%), the cash market is currently estimated to open at 4,090.35
- Germany’s DAX futures are currently down -242 points (-1.56%), the cash market is currently estimated to open at 15,289.69
- DJI futures are currently down -532.16 points (-1.48%)
- S&P 500 futures are currently down -156 points (-0.99%)
- Nasdaq 100 futures are currently down -40.75 points (-0.88%)