In the past year or so, the COVID-19 pandemic profoundly influenced the international Forex trading market. Currencies were frequently purchased and exchanged based on investors’ appetite to expand or reduce their vulnerability to more serious assets rather than on unique fundamentals. However, during 2021, traders’ attention will gradually shift towards unique fundamentals. Nevertheless, this pandemic will keep playing a major part.
Euro Currency (Forex Trading Market)
Honestly, the European currency displayed material energy at the end of 2020. In more recent years, the EUR/USD was under stress due to the European Central Bank’s dovish policy and limited increase rates in the Euro Area. However, the pandemic provided significant support for the Euro as investors shifted their awareness to the obstacles of the U.S. dollar. In 2021, EUR/USD’s main question is whether it will settle above 2018 highs at 1.2500 or continue to sink.
ECB saddened by the recent progress in the Euro’s value. Which can put more pressure on economic growth. Unfortunately, there’s not much that the ECB can do to stop the Euro from climbing higher.
The profit rate is now at the lowest point as the asset purchase program is working; ECB prefers to repeat that it has more alternatives to boost the cost-effectiveness. However, there are limits to any central bank’s power.
It is a common fact, so financiers will possibly try testing brand-new highs very soon this year. Eventually, Suppose this initial test reveals that the demand for the Euro remains eminent. In that case, EUR/USD will have a great possibility of forming a powerful upside bias against the U.S. dollar by the year 2022.
Final Thoughts
2020 was indeed interesting for international Forex trading market traders. As I am confident, 2021 will presumably bring additional levity. The market’s attention will be focused on the fate of the U.S. dollar. This currency will find itself under more stress if the Fed continues to print money.
At the same time, the world economy recovers from the blow dealt by the COVID-19 pandemic. Commodity-related currencies such as the Australian dollar and the Canadian dollar; May enjoy more support if demand for products continues to evolve unitedly with the market. It will be interesting to examine whether the British pound will continue its upside progress after Britain successfully negotiated a trade deal with the EU. As for the Euro, it may be another year of intensity against the U.S. dollar, notwithstanding the European economy’s current obstacles.
