EUR/USD extends gains 1.21 on Thursday, as investors’ appetite for the risk-associated assets remains firm.
Growing expectations of additional US fiscal/monetary stimulus under Biden’s administration combined with vaccine optimism lifted flows into riskier assets and currencies, all in detriment of the dollar.
On the calendar, Eurozone November’s final Services PMI remained in contraction territory (below the 50 thresholds). Eurozone Retail Sales for October are due later.
In the US Initial Claims and ISM Non-Manufacturing and final Markit’s Services PMI, for November.
What to look for around EUR
EUR/USD hit another high beyond 1.2100, close to highs seen in April 2018 near 1.2140, thanks to a favorable risk climate.EUR/USD appears supported by expectations of strong economic recovery in the region the rising prospect of additional stimulus in the US. Risks to this optimistic view stem from potential political problems surrounding the EU Recovery Fund and the growing possibility of further ECB easing announced in the December meeting.