Although the Euro has been strengthening against the majority of major currency pairs recently, the safe haven status of the US Dollar has ensured that the US Dollar remains the stronger of the pair. Due to US Dollar strength the pair sit towards the lowest levels seen since April 2017, although we have started to see the greenback lose some of its recent gains.
Moving forward, we could continue to see the US Dollar weaken as US politicians agreed a $2 trillion stimulus package that has relaxed the financial markets, and we can see this in the way that global stockmarkets have all risen, and a number of commodity currencies such as the Australian and Canadian Dollars have also strengthened. Sterling, which has also taken a battering recently climbed against the other major currencies as a result of the stimulus package.
As the US Dollar has benefited so much from the recent market turmoil it wasn’t unusual to see the currency lose some of its recent gains, and despite this USD remains close to the best levels available against the Euro in almost 3-years as previously mentioned.
The coronavirus is still spreading and now that Spain and Italy have recoded a higher number of fatalities than China, where the outbreak begun, we could see the Euro come under pressure.
Some of the latest news out of Europe regarding the response to the outbreak is that nine EU leaders, including those of France, Italy and Spain have called for a ‘common’ debt instrument to raise funds in order to support the health industry at this time of need, along with the EU economies. The next get-together is tomorrow so there could be an update on this subject tomorrow from EU leaders.
Perhaps the busiest time for economic updates this week that could influence the EURUSD pair will be tomorrow afternoon when US jobs data will be released along with US GDP. Both releases are expected to carry the potential for market volatility so it’s worth following the markets around 1.30pm UK time on Thursday. Do register your interest if you wish to be updated regarding market movements around this time.
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