Market pessimism over US-led trade disputes negatively impacting the US economy is now threatening the Dollar’s previous position as a safe-haven in times of market uncertainty, and this view continues to be highlighted in price action for the Greenback.
The Dollar is very much on the ropes just one week after it reached a new milestone high for 2019; attention will now be drawn towards the US employment report scheduled for release at the end of the week. Dollar buyers need to see signs of resilient job growth in the United States to see some light at the end of the tunnel.
European Central Bank to repeat pessimism on the global economy
Today’s highlight and major risk event for the Euro will be the European Central Bank meeting. It is widely expected that the ECB will leave monetary policy unchanged, but what everyone wants to know is what is the ECB’s take is on the pessimistic views that are surrounding the global economy.
The Eurozone remains bombarded by a storm of domestic and external headwinds and therefore, the likelihood is high that the ECB will deliver a downbeat assessment of its economy.
A sharp slowdown in EU inflation earlier this week, returning concerns over the Italian budget and Brexit, among many other risks, are pressuring the ECB to remain in a defensive position.
The risk factors that investors will be paying close attention to are the ECB’s economic projections. Another potential slide lower in economic forecasts, in line with revisions elsewhere that have been downgraded in recent weeks will fuel speculation that the ECB will leave interest rates at record-low levels far beyond 2020.