The positive decisions of the European Union for the region’s economy continue to be advantageous. As a result, the euro is close to $1.20 in the Forex market, a direct result of the good economic direction of the euro zone.
Europe was one of the first regions where the coronavirus hit without excess. The negative effects soon began to be appreciated when they had to start with the economic blockades. Thus unleashing a recession and weakness in the economies of the eurozone.
However, Europe has managed to recover in record time and this is projected in the quotations of the European currency in the Forex market.
The dollar closes the month of August with a minimum of 2 years
The Euro is close to 1.20
The euro is close to breaking the $1.20 mark for the first time since 2018. This is due to the fact that Europe has been able to define an economic recovery plan that worked and managed to put the Eurozone on a fast track to improving its economic figures.
In July, the European Union approved a historic package of 750 billion euros to support the countries most affected by the pandemic.
It also involved the bloc selling bonds collectively, rather than as individual nations. Since its approval, the euro has risen by approximately 3.7%.
But this has not been the case with the dollar. Well, economic decisions on the part of the US government and the Federal Reserve have only succeeded in further weakening the dollar. And with the recent decisions, the dollar bled out.
Thus, the dollar’s index (DXY) fell to a multi-year low. Because investors bet that the Federal Reserve’s policy framework meant that U.S. rates would remain low longer.
As the Fed’s announcement last week that it would tolerate periods of higher inflation and focus more on jobs, has encouraged traders to sell dollars. The euro is the biggest beneficiary, trading at the time of writing at annual highs.