Despite a positive couple of days, there EUR/USD pair has struggled to keep momentum and experienced moderate losses on 27th February 2019.
Before the loss, the European Commission’s Business and Consumer Survey highlighted that was an improvement in the Consumer Confidence Index, which had increased to -7.4 in February from -7.9 in January.
The Services Sentiment Index and Business Climate Index also enjoyed an increase. The Industrial Confidence Index dropped to -0.4, which had previously been 0.6 in January 2019.
Ewald Nowotny, Governing Council member of the European Central Bank (ECB) stated that Italy’s debt was a threat to the EU.
As has been the case for some time, the uncertainty of Brexit will have implications as to where EUR stands, as will the debt being incurred by countries within the EU.
USD Climbs Despite Lack of Data
It could have been assumed that the lack of significant economic data would have an impact on USD, been a sharp rise in Treasury yield bonds contributed to USD gaining traction.
Positive tweets surrounding the tariffs being charged have also injected more positivity into the Forex market. Trumps stated that the tariff hike would be delayed in relation to Chinese importation of goods.
There was a lot of fear surrounding the US Government back in December 2018 where there was some conflict as to how public spending should be carried out.
One of the most famous conflicts was the $5 billion required by Donald Trump so wall could be built between Mexico and the US.
As no agreement could be made as to how public money should be spent, it meant a large chunk of the US government shut down.
Although such instances have occurred in the past, when combined with other factors, it gave a very bleak outlook for USD.
Of course, much of this was speculated and recent news just show how things can change in small amount of time.
Almost a Third of Pentagon’s Money for Mexico Wall Already Spent
On 22nd February 2019, it was reported that a large chunk of the budget meant for the Mexico wall has already been spent.
As a result of the this, the Pentagon is planning to redirect money from other channels to make up for the shortfall. The balance is $85 million, but $2.5 billion is required for both the wall and border security support.
Although the White House has stated that plans to build a wall will go ahead, there is still strong opposition within.
Democratic chair of the House defence appropriations subcommittee stated that any request to repurpose Pentagon money would be denied.