EUR/USD Exchange Rate Falls as Donald Trump Temporarily Suspends Immigration
The Euro to US Dollar (EUR/USD) exchange rate dipped by -0.2% today, with the pairing currently trading around $1.083.
The US Dollar (USD) edged higher after US President Donald Trump said that he would temporarily suspend immigration into America over concerns about the spread of the coronavirus. Additionally, Mr. Trump also expressed a desire to protect US jobs.
However, the ‘Greenback’ also benefited from yesterday’s unprecedented slump of oil prices into negative territory, which left global markets anxious and investors seeking out safe-haven currencies.
Ipek Ozkardeskaya, Senior Analyst at Swissquote Bank, commented:
‘The US crude turned negative for the first time in history and traded as low as $-40 per barrel on Monday. This is because the global oil glut has become so large that there is no space left to store this large quantity of unexploited oil. The market is literally submerged.’
In US economic data, today will see the release of the US Existing Home Sales report for March. If home sales significantly deteriorated last month, then we could see the ‘Greenback’ shed some of its gains.
Euro (EUR) Falls Despite Germany’s Economic Sentiment Beating Forecasts in April
The Euro (EUR) failed to gain on the ‘Greenback’ today despite a better-than-expected German ZEW Survey for April’s Economic Sentiment, which beat forecasts of -42.3 and instead rose to 28.2.
ZEW said in its Press Release:
‘The assessment of the current economic situation, however, has worsened dramatically, with the corresponding indicator dropping to a new reading of minus 91.5 points, 48.4 points lower than in March. This constellation of values currently witnessed for expectations and the assessment of the current situation roughly corresponds to that seen in April/May 2009 during the financial crisis.’
Germany’s Current Situation gauge plummeted by -91.5 this month, leaving many single currency traders concerned for the Eurozone’s powerhouse economy going forward.
However, the Euro (EUR) has been left generally unphased by economic data today, with investors instead focusing on the Euro-area’s coronavirus developments.
Now nations like Germany, France and Netherlands, as well as heavily hit countries like Spain and Italy, are beginning to ease lockdown restrictions, some Euro investors are becoming more hopeful that the bloc can begin to make cautious steps towards economic recovery.
Nonetheless, the World Health Organization (WHO) has warned against too much complacency lest a premature easing to restrictions result in a devastating – both to public health and the economy – second wave.
EUR/USD Forecast: Will the ‘Greenback’ Continue to Benefit from Safe-Haven Demand?
Euro (EUR) investors will be awaiting tomorrow’s release of April’s flash Eurozone Consumer Confidence report. However, any significant fall in the bloc’s consumer morale, which is highly likely in April due to the coronavirus, could see the Euro fall deeper against the US Dollar.
US Dollar (USD) investors will be keeping a close eye on the nation’s coronavirus developments this week. However, with the ‘Greenback’ being a safe-haven currency, we are unlikely to see it fall against the Euro.
As a result, the EUR/USD exchange rate will remain subdued this week as investors react to the bleak global economic outlook and continue to flock to the US Dollar.
