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Reasons for EUR / USD Decline

28/11/2019

During this week, the EUR / USD currency pair is trading in a small range of about 40 points, however, periods of low volatility cannot last for a long time.

     1) Difficult relations of the parties in trading

The news of the negotiations between Washington and Beijing, when the parties did not reach a compromise and did not decide on the duties termination, is not joyful. It is likely that the trade transaction is in danger of collapse due to a lack of agreement between the two parties regarding tariffs.

     2) No Changes from the Fed

Representatives of the Fed said that over the past year, the uncertain situation in trade has become the main factor in putting pressure on the economy and business investment. Definitely, only a significant reassessment of the forecast will contribute to lowering the rate. Moreover, this approach supports the US dollar.

    3) Pressure on the Euro by the ECB Protocol

The ECB Protocol reflects the activation of pigeons, which need additional economy stimulation. ECB members announced that monetary policy did not fully exhaust its potential. This message can be repeated in the protocol, which will affect the Euro.

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