EUR/USD Exchange Rate Bolstered by Upbeat Mood
The Euro to US Dollar (EUR/USD) exchange rate is accelerating today, with the pairing being bolstered by an upbeat mood before Janet Yellen’s confirmation hearings for Treasury Secretary.
At the time of writing the EUR/USD exchange rate is trading at around $1.2135, up roughly 0.5% from today’s opening levels.
US Dollar (USD) Slips Ahead of Yellen Hearing
The US Dollar (USD) is trending lower against the Euro (EUR) and the majority of its other peers today, ahead of Janet Yellen’s appearance before the Senate Finance Committee.
The confirmation hearing for President-elect Joe Biden’s nominee to run the Treasury Department, is expected to see Yellen talk about the need for the US to ‘act big’ with its next coronavirus stimulus package.
The former Chair of the Federal Reserve said in a prepared opening statement for her hearing:
‘Neither the president-elect, nor I, propose this relief package without an appreciation for the country’s debt burden. But right now, with interest rates at historic lows, the smartest thing we can do is act big.
‘I believe the benefits will far outweigh the costs, especially if we care about helping people who have been struggling for a very long time.’
Yellen’s stressing for the need of more stimulus package is likely to help to cheer market sentiment, which looks to weigh on the appeal of the safe-haven US Dollar.
However, the ‘Greenback’ could stage a comeback if Yellen also discusses the need for future tax hikes to support the Biden administration’s policy goals.
Euro (EUR) Buoyed by Upbeat ZEW Surveys
Meanwhile, the Euro’s (EUR) accent against the US Dollar (USD) today has been aided by the apparent improvement in investor sentiment in Germany and the wider Eurozone.
According to the latest surveys published by the ZEW economic research institute earlier this morning, the index of economic sentiment increased from 55.0 to 61.8 in January, this beat expectations of a rise to 60.
ZEW President Achim Wambach, said:
‘Despite the uncertainty about the further course of the lockdown, the economic outlook for the German economy has improved slightly.
The results of the ZEW Financial Market Survey in January show that export expectations in particular have risen significantly.’
The survey for the wider Eurozone also beat expectations with the index climbing from 54.4 to 58.3 against forecasts of a rise to 57.
EUR/USD Forecast: ECB and Biden in the Spotlight Tomorrow
Looking ahead to tomorrow’s session, the Euro to US Dollar (EUR/USD) exchange rate could see some movement in response to the European Central Bank’s (ECB) latest policy meeting and the inauguration of Joe Biden.
First up will be the conclusion of the ECB’s first policy meeting of 2021. While no policy changes are expected from the bank this month, could additional comments regarding the bank’s concerns over the recent appreciation of EUR exchange rates weigh on the Euro?
This will be followed in short order by the inauguration of Joe Biden as the 46th US President.
Biden is expected to sign a flurry of executive orders in the hours following his inauguration and USD investors will be watching closely for how they could impact the US economy.