Euro falls on widening U.S. Treasury yields.
EURUSD under the bearish pressure today – as the dollar gained today on widening U.S. Treasury yields and expectations of more fiscal stimulus. President-elect Joe Biden, who is to take office on January 20 with Democrats in control of both houses of Congress, promised “trillions” in extra pandemic-relief spending. Normally, the extra spending plans would force investors to worry about its effect on the U.S. dollar in a weak economy, but the currency has been supported in recent weeks thanks to rising U.S. yields. The recent acceleration in real U.S. yields has reminded the FX markets to end its focus on inflation and to assume a more comprehensive approach in its dollar valuation – meaning further losses for EURUSD from the current levels are likely.
Expect sellers on upward corrections.
Next support to watch – 0.7640