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Euro to US Dollar (EUR/USD) Exchange Rate Falls as Fears of Rising Levels of Unemployment Weigh on Single Currency

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EUR/USD Exchange Rate Dips Despite Stronger-Than-Expected German Factory Orders

The Euro to US Dollar (EUR/USD) exchange rate dipped today, with the pairing currently trading around $1.185.

The Euro (EUR) failed to benefit from a stronger-than-expected German factory orders figures for June, which rose from 10.4% to 27.9%.

Analysts at Bloomberg commented on the data, saying:

‘The Economy Ministry said demand is already at 90.7% of the level recorded at the end of last year. Yet orders from abroad are lagging domestic demand, it said in a statement. “This shows why the recovery process going forward will be slower.”’

Meanwhile, yesterday saw the release of June’s Eurozone retail sales figures for June, which showed a full recovery. The month-on-month figure rose by 5.7%, while the year-on-year figure beat forecasts at 1.3%.

Bert Colijn, the Sernior Economist for the Eurozone at ING, commented on the report, warning:

‘Don’t get too excited about these strong numbers though, as pent-up demand fades, the picture of rising unemployment and a stalled recovery in consumer confidence will subdue sales growth in the second half of the year.’

US Dollar (USD) Edges Higher as US Markets Brace for Latest Employment Data

The US Dollar (USD) rose against the Euro (EUR) today as investors are becoming increasingly jittery over whether the United States can stem its decline in unemployment and its struggling economy.

Shinichiro Kadota, senior strategist at Barclays, commented on the ‘Greenback’s growing weakness, saying:

‘Dollar-selling seems to have resumed. We are having the same structure we saw in July.’

In US economic news, today will see the release of the latest initial jobless claims for July. If America’s unemployment problem continues to grow, however, we could see the ‘Greenback’ suffer.

James Knightley, the Chief International Economist at ING, commented:

‘Ahead of an election a poor jobs number would be the most likely catalyst to trigger compromise in Washington that would deliver another meaningful fiscal stimulus next week, while it would also heighten expectations that the Federal Reserve could step in with more stimulus.’

EUR/USD Forecast: Could Weak US Nonfarm Payrolls Dampen Confidence in the ‘Greenback’?

US Dollar (USD) investors will be looking ahead to tomorrow’s publication of July’s US nonfarm payrolls figures. If this falls significantly, we could see the ‘Greenback’ compromised as fears grow over America’s economic recovery from the Covid-19 crisis.

Tomorrow will also see the release of the US unemployment rate for July, which is expected to dip from 11.1% to 10.5%.

Euro (EUR) investors will be paying close attention to tomorrow’s release of Germany’s industrial production data for June. Any improvement in the Eurozone’s powerhouse economy’s manufacturing and industrial sector would buoy the EUR/USD exchange rate.