The Euro is still being dragged down. Overview for 27.01.2020

Investors require “safe haven” assets, thus increasing demand for the USD. 

The major currency pair continues falling on Monday. The current quote for the instrument is 1.1023.

There is little news today, that’s why investors are focusing on the information that is already known to fill the void. This information is not very pleasant: the Chinese “2019-nCoV” virus continues spreading. In some way, the virus is pretty similar to the severe acute respiratory syndrome outbreak that took place several years ago, but this time market emotions are much stronger than before. 

This week, the US Federal Reserve is scheduled to have its first meeting in 2020. The regulator is expected to decide on the key interest rate, comment on the economic climate, and hint at further steps relating to its monetary policy. 

Market expectations are pretty quiet; at the moment, economic and fiscal components are rather balanced, that’s why the regulator may remain neutral and keep the rate intact. By the way, it’s been a long time since American President Donald Trump criticized the Fed for its illogical, in his opinion, of course, monetary policy. It’s quite unusual, but can be easily understood, as he was too busy with the Middle East and China. 

The more neutral the Fed’s comments, the better for the USD. Right now, the American currency is in demand due to market players’ attempts to escape from risks caused by the Chinese virus.