EUR/USD Daily Fundamental Forecast

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EUR/USD Daily Fundamental Forecast – December 20, 2017

Colin First

Updated Tue, Dec 19, 2017, 8:25 PM

The EURUSD pair continued to move higher despite some positive developments as far as the tax bill in the US is concerned. The traders were expecting sch development to leads to the strengthening of the dollar but none of that has happened so far and we are now seeing the pair trading around the 1.1850 region and continuing to look stronger with passage of time.

EURUSD Moves Higher

The tax bill in the US has passed through one of the Houses and now looks to pass through the Senate. But there has been some last minute stalling of its progress due to some procedural issues which is likely to be sorted out today or by tomorrow atleast. The bill is expected to pass through the Senate by a few votes and once that happens, it goes to Trump for him to sign and this is likely to happen within the week. It promises to bring in large tax cuts for the corporates as a form of spurring their growth and hence is likely to push the US economy along.

But the stock markets do not seem to be too enthused about it at this point of time and though the markets had been rising over the last week or so, they did not share the enthusiasm yesterday and we saw some steady trading at best. This also seemed to add pressure on the dollar yesterday and this helped the euro to move higher during this period and this is likely to continue for the short term as we head into a period of low volatility and liquidity.

Looking ahead to the rest of the day, we do not have any major news from the Eurozone or the US except for the existing home sales data from the US. So, the focus is likely to continue to be on the tax bill for today as well and it remains to be seen how the markets would react once the bill is finally passed through the Senate.

This article was originally posted on FX Empire