Euro Climbs, U.S. Dollar Declines On Biden Transition
The euro strengthened against its major counterparts in the
European session on Tuesday, while the U.S. dollar lost ground,
after the General Services Administration told U.S. President-elect
Joe Biden to begin the formal transition, recognizing him as winner
of the election.
The move eased political uncertainty and enable Biden's team to
obtain funding, access to government data and other assistance.
Biden is expected to pick former Federal Reserve Chair Janet
Yellen as Treasury Secretary, a pivotal role in which she would
help shape and direct his economic policies.
Encouraging developments related to coronavirus vaccines and a
possible easing of lockdowns in France helped underpin investor
Investors await U.S. economic reports on home prices and
consumer confidence due later in the day.
In economic releases, revised data from Destatis showed that the
German economy rebounded at a faster than expected pace in the
third quarter, offsetting a large part of the massive contraction
in the second quarter.
GDP grew 8.5 percent sequentially in the third quarter,
reversing the 9.8 percent decline in the second quarter caused by
the coronavirus pandemic, following the relaxation of Covid-19
The euro advanced to a 1-week high of 123.96 against the yen and
near a 3-month high of 1.0850 against the franc, compared to its
previous lows of 123.55 and 1.0797, respectively. The next possible
resistance for the euro is seen around 125.00 against the yen and
1.10 against the franc.
The euro spiked up to 0.8909 against the pound and 1.5499
against the loonie, off its early low of 0.8875 and near a 2-week
low of 1.5451, respectively. The euro is likely to challenge
resistance around 0.92 against the pound and 1.58 against the
The single currency recovered to 1.6177 versus the aussie and
1.7019 versus the kiwi, from more than a 4-month low of 1.6123 and
more than a 9-month low of 1.6947, respectively seen in early
deals. On the upside, 1.66 and 1.74 are possibly seen as its next
resistance levels versus the aussie and the kiwi, respectively.
The greenback weakened to 1.1894 against the euro and 1.3380
against the pound, after rising to 1.1833 and 1.3312, respectively
in early deals. Next key support for the greenback is seen around
1.20 against the euro and 1.35 against the pound.
Pulling away from an 8-day high of 104.65 hit at 7:00 pm ET, the
greenback dropped to 104.15 against the yen. Should the greenback
continues its downtrend, 100.00 is likely seen as its next support
The greenback depreciated to near a 2-week low of 1.3011 against
the loonie, 2-1/2-year low of 0.7005 versus the kiwi and near a
3-month low of 0.7368 versus the aussie, reversing from its early
highs of 1.3085, 0.6916 and 0.7283, respectively. The greenback is
poised find support around 1.27 against the loonie, 0.72 versus the
kiwi and 0.75 versus the aussie.
In contrast, the greenback moved up to 0.9132 against the franc,
after having dropped to 0.9098 at 4:30 am ET. The greenback is seen
finding resistance around the 0.92 area.
U.S. consumer confidence index for November and FHFA's house
price index and S&P/Case-Shiller home price index for September
are scheduled for release in the New York session.