Lagarde Gives Confidence in the ECB Functioning

The US dollar has stopped declining on Friday after US Secretary of the Treasury Steven Mnuchin called for the end of some of the Fed's emergency lending programs. Investors were surprised as they counted on central bank support.

This announcement weakened earlier positive sentiment after reports that Senate Republican and Democratic leaders had agreed to resume talks on a new coronavirus stimulus package. The US Labor Department reported that 742,000 people filed jobless claims in a week ending on November 14, which is higher than economists' forecasts of 707,000 claims. Signs of weakness in the labor market are likely to persist as the outbreak of virus infections puts businesses on hold again. We recommend trading currency pairs with USD carefully, fixing positions at the nearest levels.

The ECB President Lagarde said the European Central Bank could “neither go bankrupt nor run out of money,” even if it suffered losses on the bonds it has bought under its stimulus programs. She said that as the sole issuer of euro-denominated central bank money, the Eurosystem will always be able to generate additional liquidity as needed.

Responding to a question, Lagarde added that the ECB has no legal basis for canceling the government debt it owns.

At the moment, oil prices are stable, WTI is being traded at $41.56.

Market indicators

US stocks closed with growth on Thursday due to renewed hopes for the stimulus that support market sentiment. The Dow Jones Industrial Average rose by 0.15% to 29.483.23 points, the S&P 500 rose by 0.39% to 3.581.87, and the Nasdaq Composite rose by 0.87% to 11.904.71.

The dollar index fell amid results of unemployment data. Currently, the dollar index is being traded at 92.34.

The 10-year US government bonds yield fell to 0.82% amid weak macro data.

It is worth paying attention to the news feed for today. At this time, we recommend limiting your risks in positions.

The news feed for 2020.11.20:
  • - UK retail sales at 9:00 (GMT+2);
  • - Speech by ECB President Lagarde at 10:15 (GMT+2);
  • - Core consumer price index in Canada at 15:30 (GMT+2);

by Justforex, 2020.11.20

We advise you to get acquainted with the daily forecasts for the major currency pairs.

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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