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Euro to US Dollar Exchange Rate Avoids Losses with US Coronavirus Outlook Still Uncertain

EUR USD exchange rate news

Euro to US Dollar Exchange Rate Holds Ground despite Rising Safe Haven Demand 

The US Dollar (USD) is a safe haven currency, but despite this the Euro to US Dollar (EUR/USD) exchange rate is holding its ground as coronavirus fears worsen. Global risk-sentiment is shifting on and off, and US economic concerns are preventing USD from rising. 

Last week saw highly mixed movement from EUR/USD. The pair advanced from 1.1178 to briefly touch on a high of 1.1333, before sliding again and ultimately closing the week near the level of 1.1218. 

Still, EUR/USD has ultimately held those gains this week and is avoiding losses. After days of fairly narrow fluctuation, EUR/USD is trending near the week’s opening levels at the time of writing on Wednesday. 

Optimistic data from the Eurozone today is likely to further support the Euro to US Dollar exchange rate for today. 

Euro (EUR) Exchange Rates Find Support in Eurozone Factory Data 

Wednesday’s European session saw the publication of the Eurozone’s final June manufacturing PMIs. The manufacturing projections already beat forecasts, but the finalised figures were actually even stronger than expected in many key prints. 

French manufacturing printed at 52.3 rather than 52.1, and German manufacturing came in with a smaller contraction of 45.2. Overall, the Eurozone’s manufacturing PMI improved to 47.4. 

The data continued to indicate that the Eurozone economy was surprisingly resilient amid the coronavirus pandemic. Compared to the US response to the virus, markets are impressed with how the EU has handled the crisis. 

US Dollar (USD) Exchange Rates Struggling as US Outlook Gloomy 

The US Dollar is a safe haven currency, which is typically appealing in times of global market uncertainty. 

However, the US is currently one of the nations being hit worst by the coronavirus pandemic. With US data mixed and the outlook for the nation mired in coronavirus and political uncertainty, the US Dollar’s appeal is limited. 

Yesterday saw Federal Reserve Chairman Jerome Powell testify to Congress. He warned of the potential impact of a ‘second wave’ of coronavirus infections: 

‘A second outbreak could force government and force people to withdraw again from economic activity.’ 

As the number of cases in the US is already rising rapidly, second wave fears are hitting the US particularly hard.  

Euro to US Dollar (EUR/USD) Exchange Rate Awaits Fed Minutes 

Could coronavirus jitters continue to weigh heavily on the US Dollar? The Euro to US Dollar exchange rate may continue to hold its ground and avoid losses unless the US outlook shows more signs of improving. 

While Federal Reserve Chairman Jerome Powell already made comments to US Congress yesterday, markets will still closely watch for upcoming Federal Reserve meeting minutes. 

The minutes will be published tonight, and will give investors a better idea of how Fed officials feel about the direction of the US economy. In particular, comments on the US coronavirus situation will be influential. 

Key data due in the coming days may also be influential. US Non-Farm Payroll stats will be published tomorrow. 

As for the Euro, if upcoming Eurozone unemployment and services data is stronger than expected it could make it easier for the Euro to US Dollar (EUR/USD) exchange rate to hold its ground.