The American currency regained its position after having experienced a slight decline. Throughout the week, the greenback has been actively strengthening against the euro and now this trend continues. Experts are confident in the leadership qualities of the dollar, which is still the locomotive of the market.
On Wednesday, December 18, the greenback felt more confident than ever in pairs with major currencies in international markets. This is confirmed by an increase in the dollar index by 0.2% in the EUR / USD pair. Analysts emphasize the "US Dollar" strengthened by almost 0.3%.
One of the key drivers of the greenback gain was the low probability of the Fed cutting interest rates. In the near future, the markets do not expect a rate cut from the regulator nor placing these data in quotes. Experts record the active growth of the US currency in relation to both European and British. Greenback was back on his horse, taking advantage of the situation. Recall, the pound weakened the uncertainty around the Brexit after the election and the decline of euphoria, and the Euro lost its advantages after the publication of weak data on the Eurozone economy. "European" did not help even the publication of new statistics, according to which the level of business confidence in Germany has increased significantly, exceeding the expectations of economists.
Throughout Wednesday, the European currency tried in vain to stay above the 200-day moving average, but in the end fell by 0.2%, to 1.1124, and then collapsed to 1.1120. Note that this is much lower than the 200-day moving, equal to 1.1151.
In the future, the European currency will gradually recover, there is no need to talk about steady growth. Against this background, the dollar continues to feel superior, seeking, as before, to lead the market. According to analysts, it would probably succeed.
Strong support on the greenback is provided by a positive attitude that continues on the global stock markets. It is caused by the long-awaited short-term truce in the trade confrontation between the United States and China. Inspirational macroeconomic statistics published in the United States also came into the hands of the American currency. According to the report, last month, industrial production in the country rose 1.1% after a decline of 0.9% a month earlier. Current factors were on the side of the dollar and it took the chance.
In the EUR / USD pair, the situation is gradually equalizing. On Thursday, December 19, the classic tandem is trading in the range of 1.1129–1.1130, trying to rise higher. However, these attempts did not lead to notable results.
According to analysts, a stable equilibrium in the EUR / USD pair will be maintained both in the short and long term. Of course, the greenback remains in the lead, but the "Euro" is in no hurry to give up its position. Experts believe that in the near future the tandem will maintain balance, and sharp distortions in the direction of the American or European currencies are not expected.