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Euro to US Dollar Exchange Rate Holds Near Yearly Best as Markets Digest European Central Bank (ECB)

Euro to US Dollar Exchange Rate Avoids Losses despite Slightly Higher Safe Haven Demand 

Investors remained hesitant to sell the Euro to US Dollar (EUR/USD) exchange rate today. Despite slightly higher market demand for safe havens like the US Dollar (USD), the pair continues to trend near its best levels in a year and a half. 

Following last week’s modest advance from 1.1248 to 1.1250, EUR/USD is seeing even stronger gains this week. 

Yesterday saw EUR/USD touch on a high of 1.1444. This was the best level for EUR/USD since early 2019, over a year and a half ago. 

While EUR/USD has slipped slightly from those best levels, it continues to trend above the key level of 1.14 at the time of writing on Thursday afternoon. 

Optimism about the Eurozone’s coronavirus outlook could make it easier for the Euro to avoid losses against a weakening US Dollar going forward. 

Euro (EUR) Exchange Rates Remain Supported after European Central Bank (ECB) Decision 

The Euro has been one of the most appealing major currencies in recent weeks. Hopes for the Eurozone to see a stronger recovery from the coronavirus pandemic than other major economies persist. 

Euro investors are also looking ahead to the EU’s Recovery Fund plans, which the European Central Bank (ECB) highlighted in today’s policy decision. 

The ECB didn’t make any surprising signals or shifts, instead indicating it would wait for more developments in politics and the coronavirus situation before its next action. 

According to Anna Stupnytska from Fidelity International: 

‘As the ECB switches to the ‘wait-and-see’ mode for the rest of the summer, the focus shift towards the Recovery Fund and the long-term budget. This week’s Summit might not bring a final agreement just yet, but any progress on the most contentious issues, including governance and conditionality, would send a strong signal on the prospects for the breakthrough in the near future.’ 

US Dollar (USD) Exchange Rates Struggle Even as Safe Haven Demand Rises 

Investors remain hesitant to buy the US Dollar, even as a safe haven currency, due to market concerns over the health of the US economy. 

Global demand for safe havens rose today, following shocking Chinese retail sales data. While the US Dollar is a safe currency though, concerns over the huge number of coronavirus infections in the US are keeping the US Dollar unappealing. 

Even the ECB sounded cautious about the US coronavirus surge in today’s policy decision. 

Euro to US Dollar (EUR/USD) Exchange Rate Could Remain Near Yearly Best 

The Euro to US Dollar exchange rate continues to trend high, despite the market’s brief jumps in safe haven demand. 

The US Dollar continues to struggle in capitalising on safe haven demand, as the domestic coronavirus situation continues to worsen. 

So long as US coronavirus cases keep surging, concerns over the health of the US economy and the nation’s overall outlook will worsen. US political uncertainty is likely to persist and pressure the US Dollar as well. 

Euro investors, on the other hand, are likely to keep finding the shared currency appealing as they await developments on the EU Recovery Fund. 

More comments from European Central Bank (ECB) officials tomorrow, as well as upcoming Eurozone inflation data, may only boost the Euro’s appeal if they impress. 

Tomorrow’s US building and housing data could also influence the Euro to US Dollar (EUR/USD) exchange rate.