EUR/USD Exchange Rate Heads Higher on Positive German Economic Data
The Euro US Dollar (EUR/USD) exchange rate rose by 0.2% today after the publication of Germany’s Factory Orders figure for February, which rose by 1.2%. The pairing is currently fluctuating around $1.19.
Consequently, the EUR/USD exchange rate has benefited from growing confidence in the Eurozone’s largest economy.
AP news was also optimistic about the data, saying:
‘Germany’s economy did better than several others in the eurozone as it was supported by manufacturing, which has taken less of a hit than services during the pandemic.
‘German authorities haven’t imposed any shutdowns on industry during the crisis, but many restrictions on businesses such as restaurants, bars, hotels and leisure facilities remain in place.’
Nevertheless, Europe’s ongoing Covid-19 crisis is holding back full confidence in the Eurozone’s economy, especially now that Germany may enter an extended lockdown period to stem the spread of the virus.
France is also under lockdown to prevent the nation’s hospitals being overwhelmed by coronavirus patients.
As a result, we could see the EUR/USD exchange rate’s gains being short-lived.
US Dollar (USD) Struggles as US Jobless Claims Rise in April
The US Dollar (USD) struggled today following the publication of the latest US Initial Jobless Claims report for April. The figure rose to a worse-than-expected 744 thousand.
Analysts at Reuters commented on the figure:
‘The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, but the increase likely understates the rapidly improving labor market conditions as more parts of the economy reopen and fiscal stimulus kicks in.’
USD traders are becoming increasingly worried about America’s unemployment crisis. As a result, this has dampened confidence in the world’s largest economy.
The Federal Open Market Committee (FOMC) also revealed that the Fed would maintain its monetary support.
Consequently, this has limited the appeal of the safe-haven ‘Greenback’ as investors are beginning to seek out riskier assets instead.
EUR/USD Exchange Rate Forecast: German Industrial Production Data in Focus
Euro (EUR) traders will be eyeing tomorrow’s release of Germany’s Industrial Production figure for February.
Any improvement in the outlook for the Eurozone’s largest economy would drive up the EUR/USD exchange rate.
Tomorrow will also see the release of Germany’s Trade Balance report. Any signs of improvement in the German economy would be EUR-positive.
US Dollar (USD) traders will be awaiting tomorrow’s latest PPI figure for March.
Again, if the outlook for the US economy continues to improve, then the EUR/USD exchange rate could head higher on ‘Greenback’ weakness as risk sentiment improves.