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Old 21-12-2020, 21:45
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Default Re: Daily Market Analysis by ForexMart

Brent. December 21, 2020 Oil starts to decline on news of Covid mutation

At the beginning of the week, Brent crude oil shows a decline from the $52.30 area to $49.25 per barrel. The current Brent price is $50.30 per barrel.

The decline was driven by the return to the market of fears regarding the mutation of the coronavirus in the UK. The British authorities said that a new strain has been identified in the country, the spread of which is several times higher than previous indicators. The same mutation of the Covid-19 virus has been found in the Netherlands, Denmark and Australia, according to WHO.

Oil market participants fear that a new mutation will call into question the economic recovery in the world and again negatively affect the demand for hydrocarbons.

Another factor in the weakening of the asset is the potential growth of the world oil supply, which may increase by 1 million barrels already in January due to additional supplies from OPEC+ countries, Libya, the United States and Iran.

EUR/USD. December 21, 2020 Euro started a protracted correction

As predicted by last week's forecasts, the euro rate has moved to a retreat from the highs. The current quote for the EUR/USD pair is 1.2168. The dollar is on the side of a whole set of factors: here and the mutation of COVID-19 in the UK, and Brexit, and the vote in the US Congress on fiscal stimulus.

Despite the fact that lawmakers were able to agree on the volume of a new stimulus package in the United States, it is too early to talk about a complete solution to the issue. Now the bill must pass a vote in two chambers of the US Congress. And it is possible that a failure is possible here.

News from Britain that a new Covid-19 stamp has been opened, the spread of which is several times higher than previous indicators, exerted strong pressure on the euro. Epidemiologists fear that recently developed vaccines may be powerless against the new threat, and economists are already questioning economic growth next year.

In the UK, there is another factor of pressure on the pound and the euro Brexit, the issues and disputes of which have not yet been resolved. The risks are high that instead of one big agreement, the parties will have to sign several different agreements.

Thus, the downward correction of the euro is only gaining momentum. The forecast for today assumes further strengthening of the dollar below the level of 1.2150.
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