The main currency pair is falling influenced by the “after-effect” of the German elections and new geopolitical tensions.
Late in the Tuesday afternoon, the EUR/USD pair is back to falling. The current quote for the instrument is 1.1790.
It seems that we’re back in the times, when the EUR/USD investors don’t care about the statistics, but pay a lot of attention to rumors, gossips, and other wild guesses. And the more global, the better. The market is afraid either of possible negotiations between Angela Merkel’s CDU and the opposition or shot, in theory, American aircrafts that were flying along the North Korean coast.
Let’s start from the beginning. It’s obviously that the aftermath of the German elections will trouble investors for a long time. Too many things in the Eurozone depend on the German political elite, that’s why the quieter the situation in the Bundestag, the better for the rest of Europe. The market doesn’t care which parties the CDU is going to form a coalition. The main point is to avoid any scandals.
When it comes to the Asian geopolitics, it is as complicated as the USA and North Korea want it. Trump said aloud what he wanted – North Korea took it as the declaration of war, accepted the challenge, and occasionally mentioned that they were going to practice their missiles n American aircrafts that fly around. The USA hasn’t responded to these comments yet, and that’s good. As long as these military operations remain verbal, there will be no harm to anybody.
However, investors have to take into account Donald Trump’s being unpredictable and possible responses from North Korea, that’s why they tend to keep to “safe haven” assets. In this light, the USD is looking pretty fine.
RoboForex Analytical Department