EUR/USD Accelerates Above 1.1800 Despite Strong US Data
- EUR/USD climbs to new monthly highs, US dollar slides across the board
- The pair is out of a five-month low reached on the last day of the first quarter
EUR/USD Accelerates Above 1.1800
The EUR/USD snapped its losing streak this month as market participants are growing more optimistic to hold long positions in the pair. The EUR/USD ended the first quarter in red territory, marking a decrease of 4.50%. On the last day of the quarter, March 31, the EUR/USD slipped to 1.1704. Which was the lowest point for the pair during the trimester.
Since then, the exchange rate has been trading to the upside as bulls are pushing it higher in attempts to regain new heights. On Monday, the EUR/USD registered its strongest one-day move for the month, up over 0.70% on the day. Today, traders in the currency pair remain optimistic to continue the upward swing. Currently, the EUR/USD is trading around 1.1815, with a session low of 1.1795.
On the technical front, the EUR/USD pair remains pressured below the 200-day moving average. This is used to define whether an asset is in a bearish or bullish trend for the long term. The pair’s lowest level so far in 2021 was reached on March 31 when the Euro traded at $1.17, a five-month low. However, for the month of April, the pair is staging a sharp rebound. It is up over 1% in less than seven trading days.
US Dollar Slides Across The Board
The broader weakness in the US dollar is partly attributed to Janet Yellen’s speech yesterday. Ms. Yellen, the Secretary of the Treasury, appeared before the Chicago Council on Global Affairs on Monday. She argued for a global minimum tax rate as she made the case for President Biden’s newly proposed economic plan with a price tag of over $2tn.
According to the plan, Mr. Biden intends to raise the corporate tax rate from 21% to 28%. Janet Yellen aimed to convince other countries to impose a global minimum tax as a way to reduce the likelihood of companies moving to offshore zones, popular for their tax haven properties.
“We are working with G20 nations to agree to a global minimum corporate tax rate that can stop the race to the bottom,” said the Treasury Secretary.
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