- EUR/USD Plummets – Positive US data sees improved Dollar appetite
- US Jobless Claim Data Mixed – US Dollar rally slows but stays strong
- Forecast: German PMI Ahead – Construction and Retail figures expected today
- Forecast: Eyes on US Unemployment, Non-Farm Payrolls – Vital US reports this afternoon
The Euro to US Dollar (EUR/USD) exchange rate plummeted during Thursday’s session as investors reacted to Wednesday’s optimistic US data and the Euro was left uninspired by quiet data and a predictable European Central Bank (ECB) bulletin.
EUR/USD was unable to return to the 2016-high of 1.1608 it reached on Wednesday and instead continued downwards, ending Thursday’s session lower than the week’s opening levels of 1.1451. At the time of writing, the pair was around -0.5% down and trending in the region of 1.1430.
Euro (EUR) Flounders on Light Data and Dull ECB Bulletin
Eurozone data was uneventful on Thursday, with the day’s sole Eurozone Retail PMI release rescheduled for a later date.
The shared currency was previously weakened by a slew of underwhelming final PMI releases for April, as well as disappointing retail sales figures released on Wednesday. The key year-on-year retail sales score was revealed to have slowed from 2.7% to 2.1%.
Thursday, on the other hand, gave investors little to react to besides the European Central Bank’s (ECB) May bulletin, which issued dovish warnings that were largely consistent with what was said following April’s key rate decision.
‘The economic recovery in the Euro area is still dampened by the ongoing balance sheet adjustments in a number of sectors, the insufficient pace of implementation of structural reforms in some countries and subdued growth prospects in emerging markets. The risks to the Euro area growth outlook remain tilted to the downside.’
US Dollar (USD) Strengthens on Strong ISM Non-Manufacturing
Wednesday’s session included a healthy helping of US data that allowed the ‘Greenback’ to recover from its previously bearish behaviour. The most important of the recent releases was the latest ISM Non-Manufacturing report.
The highly anticipated April score came in at 55.7, well above the forecast 54.8. This, alongside solid PMIs, an optimistic trade deficit narrowing and promising factory orders figures, allowed investors to prepare for the US Dollar’s advance.
Recovery was initially slowed by ADP’s latest employment change report, which came in at a disappointingly low 156k.
However, as the Euro appeared increasingly unappealing following the ECB’s uninspiring bulletin on Thursday, the US Dollar began its rally.
Its gains were slowed by mixed jobless claims data released on Thursday afternoon. The number of new jobless claims was an unexpectedly high 274k in the April 30th report. Only 260k new claims were expected to be made.
Fortunately the number of continuing jobless claims actually dropped further than expected, from 2130k to 2121, indicating that unemployment may have dropped.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast: German PMI, US Unemployment Due
The EUR/USD exchange rate looks to finish off the week with a bustling economic calendar today, with vital Construction and Retail PMI scores being released from Germany.
These figures have the chance to bolster the Euro if they print optimistically, as Germany is the Eurozone’s largest economy.
Eurozone reports will be followed later on in the day by a slew of vital US data, including the highly anticipated April unemployment rate and Non-Farm Payrolls. The unemployment rate is currently forecast to remain at 5.0%, and a 200k change in Non-Farm Payrolls is predicted.
US wage data and working hours data is also due for release and are projected to slightly improve. It’s likely that the US Dollar’s latest advance on the Euro could succeed if these numbers print as expected (or higher), but disappointments could lead to EUR/USD moving flatly once more.