The Euro collapsed to its 10-month lows. Overview for 19.08.2021

EURUSD remains under the thumb of bears and continues falling.

The major currency pair is looking even weaker than yesterday. The current quote for the instrument is 1.1690.

Just as expected, yesterday, market players’ attention was completely focused on the US Fed Meeting Minutes. The document said that most FOMC members were in favour of reducing the QE program volume by the end of the year if the country’s economy recovered according to the plan. This was exactly what investors wanted to hear – the American regulator was ready to wind up stimulation. And the USD skyrocketed. 

There is a buzzword for this right now, tapering. The Fed believes that the current economic and financial conditions justify the stimulus reduction in the coming months. Some FOMC members are sure that the most suitable period for that is early 2022 when the country’s labor market becomes even more stable. 

The speed of the reduction procedure should be in a way that the stimulus decreased until the economy gets things back on the rails. In other words, slowly without any jumps. 

The document will remain dominant on the market for the next several days, which means that the “greenback” got the support investors hoped it would. What is all that but an age of the strong USD? Well, at least for a couple of days.