FX.co ★ EUR/USD: the dollar is in no hurry to continue its decline while the world is in the midst of a pandemic that is wreaking havoc on economic turmoil

Since the beginning of November, the US currency has fallen by more than 2%.

As the date of widespread distribution of the COVID-19 vaccine approaches and the uncertainty associated with the US presidential election decreases, there are fewer reasons for investors to turn to the US currency for protection.

On Wednesday, the USD index sank below 92 points, being in close proximity to the September low of 91.75 points.

According to some analysts, the dollar's decline was so rapid that it may recover in the short term. At the same time, some experts predict a decline in the US currency in the longer term, as they expect the pandemic to weaken next year.

So far, the coronavirus continues to march across the planet.

The number of cases of COVID-19 infection in the world has exceeded 60 million.

In the United States, 1 million new cases of coronavirus were recorded in less than a week. As a result, the total figure exceeded 12.5 million.

The data released yesterday cast a shadow on the prospects of one of the world's largest economies. So, the number of initial applications for unemployment benefits in the United States for the week ended November 21 was higher than expected - 778 thousand with a forecast of 730 thousand applications.

Some economists believe that the likelihood of job losses in the country will increase in the near future, as many states strengthen quarantine restrictions in order to contain the spread of COVID-19.

Weak statistical data, as well as the minutes from the November Fed meeting, which showed the regulator's mood for further policy easing, put pressure on the US currency. At the same time, the paused rally in the global stock market held back the dollar's retreat.

On Thursday, the greenback is trading near the eight-month support line around 92.00 points, and so far it has managed to bounce back from recent lows near 91.85 points.

Meanwhile, the EUR/USD pair is trying to gain a foothold in the area of 1.19-1.20.

On the one hand, positive news about the development of a COVID-19 vaccine supports the euro, on the other hand, concerns that the European economy will have to endure a few gloomy months limit the growth of the single currency.

The incidence of coronavirus in the region is growing. European countries are resuming restrictive measures aimed at containing the second wave of the pandemic. This threatens to push the Eurozone economy down by double digits.

Over the past five days, about 1 million new cases of COVID-19 infection have been registered in Europe. The total number of cases exceeded the mark of 16 million people.

"The situation in the EU could get even worse before it improves," said Andrew Kenningham of Capital Economics.

It is expected that lockdowns in the region will continue for two to three months, and the rate of decline in the economies of different countries will be different.

According to the forecast of Capital Economics, in the fourth quarter, the GDP of the Eurozone may shrink by 3%.

"Yesterday, the EUR/USD pair broke through strong resistance at 1.1920. We expect continued growth, although it may occur at a slower pace, and the next resistance at 1.1980 is unlikely to come into play soon. A breakdown of strong support at 1.1840 will signal a weakening of the upward pressure," UOB experts said.