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Euro to US Dollar Exchange Rate Edges Higher after Last Week’s Losses

Euro to US Dollar Exchange Rate Up as Safe Haven Rally Softens 

Investors have been buying the Euro to US Dollar (EUR/USD) exchange rate again today, following the considerable losses seen last week. The US Dollar’s (USD) safe haven rally has softened since last week but the pair’s recovery is still limited. 

Last week’s movement was significant. EUR/USD opened last week at the level of 1.1843 and shed a huge two cents throughout the week, closing at the level of 1.1634. 

EUR/USD also touched on a low of 1.1613 – the worst level for the pair in two months. 

Today though, investors have been buying EUR/USD back from its lowest levels. At the time of writing, EUR/USD is trending near the level of 1.1670. 

As well as coronavirus developments, US politics will return to focus this week with the first US Presidential Debate set for tomorrow night’s American session. 

Euro (EUR) Exchange Rate Gains Limited amid European Central Bank (ECB) Comments 

The Euro (EUR) was sold last week, as investors bought its safe haven rival the US Dollar instead. 

Demand for the Euro was further pressured by signs that the Eurozone’s coronavirus situation was worsening, as a second wave spread across Europe. 

This week, these factors continue to weigh on the Euro. Today saw European Central Bank (ECB) President Christine Lagarde make fresh comments on the threat of the coronavirus pandemic: 

‘While Eurozone economic activity rebounded in the third quarter, the recovery remains incomplete, uncertain and uneven. Consumer spending has resumed significantly, but consumers remain cautious owing to anxiety about their job and income prospects. 

Similarly, business investment has been picking up, but weaker demand and elevated uncertainty continue to weigh on firms’ investment plans.’ 

US Dollar (USD) Exchange Rate Rally Softens as US Political Uncertainty Rises 

The US Dollar saw a surge in demand last week. Investors bought the currency from lows as markets looked for safe havens, as fears about the coronavirus pandemic worsened around the globe and political uncertainties worsened. 

However, concerns about the pandemic’s impact on the US economy, as well as US economic uncertainties, are still limiting the US Dollar’s appeal as well. 

The US Dollar is benefitting from safe haven demand, but it fell slightly from its weekend highs today due partially to these uncertainties. 

Markets are also anxious ahead of tomorrow’s American session, when the first US Presidential Debate will be held. 

Euro to US Dollar (EUR/USD) Exchange Rate Awaits US Presidential Debate 

For now, the Euro to US Dollar exchange rate remains under pressure as coronavirus and political jitters keep market demand for safe havens afloat. 

The US Dollar’s potential for gains may be limited in the coming sessions though, as investors await the upcoming US Presidential Debate. 

The first televised debate between US President Donald Trump and Democrat Party candidate Joe Biden will be held during the evening of tomorrow’s American session. 

Reaction to the debate and how it could influence the upcoming Presidential Election have the potential to drive the US Dollar this week. 

Some analysts believe EUR/USD has more potential to resume its advances. According to Analysts at ING: 

‘We think Euro/Dollar should find good long-term demand below the 1.1600 area, but really require some better news on the global recovery – effective lockdowns, vaccines, new stimulus – before the Euro/Dollar rally fully resumes’ 

In terms of data, tomorrow’s Eurozone consumer confidence and US wholesale inventories stats could also influence the Euro to US Dollar (EUR/USD) exchange rate.