The dollar has started off Friday on the front foot with dollar to euro exchange rates pushing to a fresh one month high to start off the Friday morning session.
Both currencies have had a fairly poor 24 hours in terms of economic data releases so had been stuck in somewhat of a stalemate situation, however it does seem that the dollar has decided to make a move as we head towards the end of the trading week.
Yesterday morning saw the release of various European Purchasing Managers Index (PMI) figures, which showed a huge drop off in activity in the Eurozone. Services PMI data fell to a record low whilst manufacturing PMI data fell to over an 11 year low. PMI data is a good barometer for economic health in the services and manufacturing sector, and whilst I would expect that PMI data around the world will likely slump due to current global trade conditions, these latest releases for the Eurozone do make for particularly bad reading for what the future may hold for the euro.
On the US dollar side, news broke yesterday that the number of jobless claims added to over 4 million just last week. This now suggests that all of the jobs created since 2009 have now effectively been wiped out and that the US are now back to the same employment situation that they were in shortly after the great recession, so this equally is not pretty reading for the dollar.
Less people working equates to less money being spent in the economy and a bigger drain on Government resources, and it does not seem like the trend has finished yet with the US still firmly in the midst of the pandemic.
Both economies are looking to have a rocky patch so it would not be a great surprise to see EURUSD exchange rates be fairly volatile in the weeks and months to come. If you are considering carrying out a currency exchange between this pairing in either direction it may be prudent to get in touch with us using the form below, so that we can help you navigate a very testing market.