Euro Falls Against Dollar on New Year’s Eve, but Its Still Up 8.9% in 2020

Today, the euro fell against the dollar on the last day of 2020 reversing a 3-day winning streak as traders took profit on their bullish positions amid thin trading conditions. The EUR/USD is still on track to close the year up 9% having printed a yearly high of 1.2310 last hit in April 2018 boosted by the weak dollar and the upbeat investor sentiment.
The EUR/USD currency pair fell from an initial high of 1.2309 during the Australian session to a low of 1.2221 during the American session and was headed lower at writing.
The currency pair fell today capping off a year of gains that saw it trade at multi-year highs as investor risk appetite remained stable. Despite today’s decline, the currency pair was still on track to end the year 9% higher, a great feat for the single currency given the massive volatility witnessed throughout the year. Investor optimism was fueled by the global rollout of the COVID-19 vaccine, which promises to return the world to normal, fueling renewed economic activity. The new US government under Joe Biden also contributed to the positive mood.
The pair’s decline was also driven by the dollar’s rally as tracked by the US Dollar Index, which hit a high of 89.97 today. The release of the upbeat US initial jobless claims report, which came in at 787,000 new claims beating analysts consensus estimates of 833,000 also fueled the pair’s decline.
Most investors view today’s decline as a temporary pullback; the euro is expected to rally higher in 2021.
The EUR/USD currency pair was trading at 1.2216 at 19:00 GMT having fallen from a high of 1.2309. The EUR/JPY currency pair was trading at 126.14 having dropped from a high of 126.97.
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Original from: www.earnforex.com