EUR/USD Exchange Rate Falls as Europe Lags Behind in Covid-19 Vaccine Rollouts
The Euro US Dollar (EUR/USD) exchange rate dipped today as the outlook or the Eurozone’s economy continues to suffer, with Europe having now exceeded 1-million deaths from the Covid-19 pandemic. The pairing is currently fluctuating around $1.19.
In Eurozone economic news, today saw the release of the latest German Harmonised Index of Consumer Prices figure for March rise by 2%.
However, this failed to provide any notable influence on the EUR/USD exchange rate as investors are still cautious about the outlook for the Eurozone’s economy.
Europe’s Covid-19 vaccine rollout still remains an issue in the bloc, with the latest blow arriving in the form of the Johnson & Johnson vaccine following reports of blood clots.
As a result, this has put a break on some of the EU’s ability to rollout vaccines, meaning that the bloc is now lagging behind other key economies, including the UK.
Meanwhile, Germany – the Eurozone’s largest economy – continues to struggle with the third-wave of Covid-19.
US Dollar (USD) as US-China Trade Tensions Boost Demand for Safe-Haven ‘Greenback’
The US Dollar (USD) rose today because of increasing tensions between Washington and Beijing. As a result, this has driven demand for the safe-haven ‘Greenback’.
Any tensions between the world’s two largest economies tends to benefit the US Dollar, as this dampens global risk sentiment and buoys demand for safe-haven currencies.
Today saw the release of the US retail sales figure for March, which beat forecasts and rose by 9.8%.
James Knightley, the Chief International Economist at ING, commented on the report:
‘Looking further ahead the story remains very positive although we are increasingly likely to see people switiching purchases away from “things” to “experiences” as we make up for lost time. Job opportunities are improving markedly while extended Federal unemployment benefits continue through to September giving the unemployed the guarantee of robust financial support should they fail to find work.’
A dip in US Treasury yields, however, has dampened the appeal of the US Dollar.
Added to this, growing confidence in the global Covid-19 vaccine rollout has improved global risk sentiment and has begun to drag on the appeal of the ‘Greenback’.
EUR/USD Exchange Rate Forecast: Could Downbeat US Consumer Morale Weaken the ‘Greenback?
US Dollar (USD) traders will be awaiting tomorrow’s publication of the latest US Michigan Consumer Sentiment index for April.
Any signs of improvement in the US economy could further boost the US Dollar.
Meanwhile, Euro (EUR) investors will be awaiting the release of the latest Eurozone inflation figure.
The Euro US Dollar (EUR/USD) exchange rate could begin to suffer, however, if the outlook for the bloc’s economy continues to deteriorate.