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Published on 16/10/2020 9:54:55 AM | Source: Angel Broking Ltd

Covid-19 Rage To Keep The Shared Currency Under Check by Mr. Vaqarjaved Khan, Angel Broking Ltd

Posted in Currency Report| #Expert Views #Currency Tips #Angel Broking Ltd

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Below is the Views On Covid-19 Rage To Keep The Shared Currency Under Check by Mr. Vaqarjaved Khan, Research Analyst, Angel Broking Ltd

EURUSD pair has strengthened for by 4.76 percent since the start of August 2020 and in line with its international counterpart EURINR has depreciated by 3 percent during the same time frame. Meanwhile, dollar index has declined by 4.2 percent in the same time frame. However, Euro has remained under pressure in recent times on account of rising number of cases in coronavirus in major European economies

Spain and France become the new hotspot in EU

Major European economies are downgrading already dire economic forecasts on the back of second wave of coronavirus cases in most parts of the European Union. EU has recorded more than 6.3 million cases in totality.

Spain has been recording nearly 9500 cases and France has been recording on average 14000 cases every day since the start of September. In Line with partial lockdown and restrictions in certain parts of Spain and France economic recovery is likely to plateau out in the fourth quarter of 2020.

The Bank of Spain has warned the economy is likely to contract by 10.5 percent in 2020 and may be by 12.6 percent in a worst case scenario. France too is expecting GDP to decline by 9 percent in 2020.

PEPP to remain in focus to aid the ailing EU

In the latest ECB monetary policy meeting the committee decided to keep interest rates unchanged and stimulus package also to provide support to the pandemic hit nations within the bloc.

Along with the monetary package Christine Lagarde has urged fiscal policy makers to continue to spend heavily to aid the bloc’s economic recovery from its pandemic induced recession. However, with debt levels rising beyond 100 percent of GDP for the year, concerns are rising whether the Governments will be able to push to through more support and subsidies, raising the risk that unemployment and income schemes could abruptly end.

However, despite all the efforts economic recovery in the euro area remains incomplete, uncertain and uneven according to the Central Bank and is likely to get affected more on account rising cases of Covid-19.

Outlook

US daily number of coronavirus cases had dropped significantly from its peak of 50,000 cases per day to 30000 cases per day. But since the start of September daily cases in US are again peaking at 50000 cases. Similar story of a second wave of cases can also be experiences in most parts of EU especially in Spain and France.

Outlook

US daily number of coronavirus cases had dropped significantly from its peak of 50,000 cases per day to 30000 cases per day. But since the start of September daily cases in US are again peaking at 50000 cases. Similar story of a second wave of cases can also be experiences in most parts of EU especially in Spain and France.

Hence, EURINR(CMP: 86) is likely to move in range from 85 mark at the lower end of the spectrum and 87 mark at the higher end by the end of Nov’20.

 

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