EUR/USD: The downside is more appealing than the upside

The market mood has been positive, diminishing demand from the safe-haven dollar, yet this may change due to rising Sino-American tensions and concerns about the US economy, FXStreet’s analyst Yohay Elam reports.

Key quotes

“Sino-American tensions remain elevated on several fronts. The US continues accusing China of failing to keep coronavirus under control as Peter Navarro, a senior White House adviser, said that the world's largest economy deliberately sent infected people to sow the seeds of the disease in other countries.”

“Hu Xijin, the editor of the Global Times, advocated that his country should arm itself with additional nuclear weapons amid American aggression.” 

“In an interview to 60 Minutes, Jerome Powell said that it could take up to late 2021 for the economy to recover, and in any case – he does not foresee a full recovery without a vaccine. Powell warned that the unemployment rate could hit 25%.” 

“Europe's largest economies are gradually opening up. However, there are still doubts about the ECB's ability to help. The German constitutional court's ruling that the part of the ECB's bond-buying scheme is illegal may limit further action and governments' willingness to spend.”