EURUSD rises slightly against the dollar in a calm market

The euro was gaining slightly against the dollar on Monday in a quiet market, with some European trading remaining closed for Whitsun, while bitcoin was recovering a little after a difficult weekend.

Around 18:30 GMT (20:30 in Paris), the euro was gaining 0.28% against the dollar, at 1.22147 dollars per euro.

“A whole part of Europe is on vacation, so activity is limited,” commented Jeffrey Halley, an analyst at Oanda, who notes that market players are already looking ahead to Thursday, when the U.S. GDP estimate will be released. “This could give a boost to those worried about inflation,” he added.

Since the beginning of the year, and the advance of the vaccination campaign in the United States, the market has been wondering whether the post-Covid-19 pandemic recovery and successive stimulus packages will lead to an inordinate rise in inflation.

While inflation alone should make the dollar less attractive, it could push the U.S. Federal Reserve (Fed) to raise policy rates in the longer term, which would instead make the greenback more attractive.

“Fed officials have made it very clear that they see the recent rise in inflation as temporary, and that they would not even consider raising rates,” recalled Ulrich Leuchtmann, an analyst at Commerzbank.

For now, it would seem that the dollar is suffering from speculation that the Fed will reduce its asset purchasing program sooner than expected.

(Chart Source: Tradingview 24.05.2021)

Meanwhile, on the cryptocurrency side, bitcoin was up 3.5 percent to $36,484 after again approaching the $30,000 mark on Sunday, which it has not crossed since January.

“Cryptocurrencies remain in trouble as Chinese efforts against exchanges, but also mining, take effect,” commented Neil Wilson, an analyst at Markets.com.

Disclaimer: This material has been created for information purposes only. All views expressed in this document are my own and do not necessarily represent the opinions of any entity.