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The euro in small form against the dollar in a calm market

13/10/2020
Source : boursorama.com
Categories: Economy/Forex

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The euro continued its slight decline against the dollar on Tuesday, in a calm market and reluctant to take risks.

Around 08:55 GMT (10:55 in Paris), the euro lost 0.17% against the greenback, to 1.1793 dollar.

"Risk aversion is the sentiment prevailing in financial markets on Tuesday, so it's no surprise that the dollar," a traditional safe haven, "has regained some of the ground lost in recent days," said Ricardo Evangelista, an analyst at Activtrades.

On Friday, the greenback had hit a low since September 21 against a basket of currencies.

The suspension of the clinical trial of the pharmaceutical group Johnson & Johnson of a vaccine against Covid-19, one of the participants having fallen ill, encourages traders to be cautious, as well as the "impasse" on the negotiations of an economic recovery plan in the United States, adds Mr. Evangelista.

This renewed uncertainty benefits the dollar as a safe haven.

At the same time, the pound held above $1.30, a symbolic threshold crossed on Friday for the first time in a month.

"The new restrictions to counter Covid-19 announced by Prime Minister Boris Johnson have been less restrictive than feared," said Lee Hardmann of MUFG, "they give strength to the pound in the run-up to this week's summit of European leaders."

Brexit is indeed on the agenda again this week, as the deadline set by Mr Johnson to find a trade agreement with the European Union falls on Thursday.

In addition, the Bank of England (BoE) sent a letter to financial institutions on Monday to find out how prepared they are for the implementation of a negative policy rate, a hypothesis long ruled out and finally mentioned last month.

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