The USD has been losing against most G-10 currencies after increasing doubts that the US economy will quickly rebound after the coronavirus wave as economic data continues to show a shrinking GDP and increasing unemployment. A stimulus package expiring today is on doubt as lawmakers have so far failed to agree the new measures.
Meanwhile, a less gloomy picture is seen in the EU where although some big economies like Spain and France continue to struggle, other countries like Germany and many smaller ones in the central and eastern Europe have managed to minimise their losses. In addition, EU countries agreed a massive stimulus plan earlier this month increasing investors’ confidence in the eurozone.
The euro hit a two-year high of $1.1905 having gained 5.8% so far in July, the biggest gain in a decade. It has been gaining steadily against the USD since mid-June and seems now on track to reach the psychological resistance of $1.2. The first resistance after that would $1.2089 reached in September 2019. If US lawmakers agree a new stimulus pack, the short term support would be $1.1165.