The exchange rate between the Euro and the US dollar has fallen again. The Euro has lost at least 70 points that the US dollar has gained in the past five days. This drop is a result of two causes, which are; the cautious new ECB head called Christine Lagarde and the coronavirus widespread in China.
The Eurozone has a strong economy compared to china, and in recent days, there has been an ongoing trade war between the countries. If the Chinese economy drops, also the European economy stumbles to a considerable extent. For example, in the year 2013, More than 700 Chinese died of the pandemic, which led to falling in retail sales by half. The virus is considered less dangerous. Currently, it spreads faster than it used to be. The primary reason for this fast development is that the China road infrastructure has developed than before, making it easy to interact with each other. China has rapidly grown, making the increase in the price of global goods such as oil despite the constant rate of the exchange rates.
Ms. Lagarde was highly disappointed with the investors announcing the desire to reverse the ECB strategy. The revision of ECB is a long process and complicated, and it will end by the end of 2020. Although, President Trump warned the European Union about the possibility of introducing extra duties on exports and the risks for the Eurozone are a twist. In the same way, the European Union has a regulation that will maintain the engagement approach on its monetary policy.
Parallel on the background of such announcements by Ms. Lagarde, and the Chinese epidemic, with the favorable business activities, did not help Germany and the European Union to pair the Euro and Dollar. The pair may fall to 1.102 by this week Friday. Financial experts warned the Euro might fall to 1.100 by the end of the week.
The business activity on24th Friday, January 2019, The British currency reached 1.13172 but also dropped faster than expected. The change of the interest rate in the Bank of England meeting on January 30 will fall even in the notorious coronavirus chines, which lead the fall.
The change in the GDP/USD is something that people expected because, in the past days, it was dropping. In the last session, the pair traded at 1.3080 with slight correction of the mid-term pivot point zone in the upward direction between the ranges of 1.3050-1.3085.