The Euro to US Dollar (EUR/USD) exchange rate is rangebound today as Euro gains are limited by lockdown extensions.
At the time of writing the pair is currently trading at around $1.2137.
Euro (EUR) Benefits From US Dollar (USD) Weakness
The Euro continues to benefit from the weakness of the US Dollar today as global market sentiment increases.
Demand for the Euro has risen, and vaccination rollouts begin across the bloc improving confidence in the single currency.
The European Commission (EC) have been hawkish in their comments regarding the state of the Eurozone’s economic recovery, the EC is predicting that EU economies will return to pre-crisis levels of output earlier than expected in the autumn of 2021.
However, news today comes that Germany, the Eurozone’s largest economy, is planning to extend its national lockdown until mid-March.
The announcement has limited the Euro’s gains today, as investors are cautious that the extension of the German lockdown could have severe consequences regarding the economic recovery of the Eurozone.
In Eurozone economic news, today saw the publication of the German wholesale price index, which rose by 2.1% month-on-month, adding support to the Euro.
US Dollar Struggles on Back of Jobless Claims
The US Dollar struggled today as jobless claims data were way above forecasts, though down on last week’s claims.
The number of Americans filing for unemployment benefits fell to 793,000 at the start of February, and down from the previous week’s figure of 812,000 but was well above market expectations of 757,000.
Gus Faucher, Chief Economist at PNC Financial Services Group commented on the data:
‘Job growth will remain soft for the next few months as the nation continues to struggle with the pandemic.’
‘But job growth will pick up in the spring as vaccine distribution and better weather make people more willing to venture out, and stimulus efforts have given consumers more money to spend.’
The data causes investors to remain cautious of USD and uncertainty remains over the size and timing of President Joe Biden’s proposed stimulus.
Euro to US Dollar Outlook: EU Vaccine Rollout in Focus
The US Dollar could find some support tomorrow if February’s Michigan consumer sentiment index rises as forecast.
As there are no notable data releases from the Eurozone before the weekend, EUR movement will continue to be dictated by further coronavirus developments and global market sentiment.
If there are any further indications that the EU’s vaccine rollout remains slow could push the Euro down.