The euro returned to $1,1800 on Wednesday after several macroeconomic data failed, oil prices fell and the coronavirus epidemic added another variant.
In a short period of time, some ingredients have been added that affect the foreign exchange market. The US service sector purchasing manager indices for June gave rise yesterday to doubts about the recovery potential of the US economy. These led to a sharp fall in the oil price and long-term interest rates of the United States.
There is also new developments at the COVID front: the relatively new lambda strain. It makes the cocktail of doubt even more profound, with the fall in oil prices reflecting a concern about cyclical resilience and economic recovery, but still leading to an increase over the dollar, the effect of which is not immediately visible at the moment. Without a fall in oil prices, the euro exchange rate would probably have been at a different level.
We should look forward to the minutes of the Federal Reserve on the occasion of the Fed’s most recent meeting, especially for the fine details. On Thursday, the emphasis is on the strategic meeting of the European Central Bank, we expect that the policy-making body, its interest rate policy is focused on an inflation rate of 2 per cent at close to 2 per cent now.
The president of the Federal Reserve of Atlanta Raphael Bostic is the only speaker today.
The euro was down 0.2 percent on $ 1,1830 on Wednesday. The European currency recorded 0.3 percent lower at £ 0.8581. The British pound rose by 0.2 percent on Wednesday and stood at 1,3784 dollars.