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We have seen a week full of economic events and developments regarding the COVID-19, but this week may not be any less important than last week, as we wait for many economic data that will prove the trends of the major economies amid global health crisis threatening the global economy.
The US Dollar Index continues to rally since the Federal Reserve decision last week, reaching as high as 93.60’s at the end of the US Session yesterday.
However, the rally has stalled since the beginning of the European session today, declining back all the way to 93.30’s ahead of some key economic releases today.
US President Donald Trump on Wednesday offered proposals for tax adjustments that would be the largest in US history, and told reporters at the White House that they would be something special for Americans. The dollar rose over the course of today's trading, as the dollar index rose from a daily low at 92.79 to reach its highest level since August 23 at 93.40.
After few months of declines, nearing its lowest level since a year, Crude Oil prices finally recovered their year’s losses, posting the longest weekly gaining stake for this year.
Yet, the question remains here, Will the current rally continue? Is it sustainable? And why Crude is gaining despite the fact that OPEC did not extend the current deal yet?
On the economic calendar today, the most prominent headline was Janet Yellen, FED Governor speech, entitled "Inflation, Uncertainty and Monetary Policy", warning FOMC from moving too gradually and confirmed that the Fed able to meet the inflation target of 2%, and not considering changes in the target, noting that it is the uncertainty that strengthens the policy of gradually rate hike, which she supports despite the weakness of inflation.
The US Dollar Index managed to rise since the beginning of the week, despite the latest geopolitical tensions between the US and North Korea.
North Korea’s Foreign Minister said that the international community should clearly remember it was the US that declared war on North Korea.
The start of the week was dramatic for the euro, despite the success of Angela Merkel for a fourth term during the German federal elections on Sunday, September 24, the Christian Democratic Union (CDU) and the Christian Social Union (CSU) win 33% of the vote. The ruling party's current partner the Social Democratic Party (SDP) printed the worst result since the Second World War by getting 20.5%, prompting the leader of the party to describe this day by bitter today, and the shock was in the success of the far right-wing party to enter parliament for the first time in half a century, represented by the Alternative for Germany Party (AFD), which has not been established for 4 years.
The weekend saw flaming events as elections were held in New Zealand and Germany, New Zealand's ruling National Party has won the largest number of votes, reaching 46%, while the opposition Labor Party has won 35.8%. The next few days will witness talks in order to form a coalition, to form the new government pending the announcement of the results officially on October 7.
After a week full of economic releases and key events, which had a notable impact on the markets. Another week comes with some key economic releases, which likely to keep the volatility on the rise.
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