EUR/USD suffers biggest monthly loss since July 2019

 

  • EUR/USD dropped in September, ending a four-month losing streak. 
  • Risk-on weighs over the dollar and lifts EUR/USD on Thursday. 
  • The ECB’s plan to adopt average inflation targeting could cap the upside in the euro.

EUR / USD fell 1.82% in September, confirming its biggest drop in one month percentage since July 2019.

The loss in September, which broke a winning trend for four months, came as the US dollar experienced a general recovery oversold. Expectations that the European Central Bank would seek to put the brakes on the rally of the euro also weighed on the common currency.

At press time, EUR / USD is trading at 1.1742, representing a gain of 0.18% on the day.

rebound looks to have been fueled by gains in Asian stock markets and the dollar’s weakness resulting wide basis.

The reports indicating progress in talks fiscal stimulus in the United States appear to have boosted risk appetite. Stocks face selling pressure during the hours of US stock market Wednesday after President Trump said that the election results Nov. 3 may not be known for months.

And while EUR / USD is currently highest bid, the gains remain elusive, as the European Central Bank (ECB) is looking to bring its online strategy with inflation the Federal Reserve (Fed). The ECB president said Wednesday that the goal of inflation of 2% on average can enhance the ability of monetary policy to stabilize the economy to face the lower limit.

The Fed adopted targeting average inflation in August – a more relaxed approach to control inflation. Under the new strategy, the Fed plans to keep rates low for a while after inflation exceeded the 2% target. The ECB is now eyeing a similar path.

Thursday’s data calendar is heavy with the final German and eurozone manufacturing PMIs for September, the unemployment rate in the euro zone for August scheduled for the United States and the weekly jobless claims, data on September income.

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