EUR/USD Exchange Rate Rangebound as New York Governor Claims ‘Worst is Over’
The Euro to US Dollar (EUR/USD) exchange rate held steady this morning, with the pairing currently trading around ding around $1.09.
The US Dollar (USD) failed to gain on the single currency after US President Donald Trump claimed ‘total’ authority to lift the nation’s coronavirus lockdown, despite conflicting governors and legal experts.
However, Andrew Cuomo, the Governor of New York, was optimistic saying that the ‘worst is over’ for NYC. He also added:
‘Nobody has been here before, nobody has all the answers. Addressing public health and the economy: which one is first? They’re both first.’
Concerns over the US economy are continuing to weigh on the US Dollar as the coronavirus pandemic continues to drag down employment and the nation’s manufacturing sector.
Richard Clarida, the Vice Chairman of the Federal Reserve, was however optimistic that the Fed would not be required to support the economy indefinitely.
Any further indications of hope for the world’s largest economy could see the USD/EUR exchange rate begin to rise.
The safe-haven ‘Greenback’ has also suffered from a moderate sell-off after Chinese trade data beat forecasts last month. This boosted risk-sentiment as the world’s second largest economy continues to show signs of improvement following it earlier coronavirus outbreak.
The Euro (EUR) Steady as Coronavirus Cases Ease in Italy and Spain
The Euro (EUR) has continued to benefit from a sustained fall in the number of coronavirus (Covid-19) cases throughout Europe’s worst-hit nations such as Italy and Spain.
Yesterday saw the death toll fall to 431 in a day, which was the lowest 24-hour period since 19th March. Additionally, the number of patients admitted to intensive care wards had fallen for its ninth consecutive day.
Meanwhile, countries like Austria are beginning to ease lockdown restrictions to recover their economies. Consequently, single currency investors are becoming increasingly optimistic about the Eurozone’s economy as the coronavirus begins to slacken its grip.
However, the EUR/USD exchange rate has been held back by increasing fears that the Eurozone will face a severe recession this year. This follows news from France’s Finance Minister, Bruna Le Maire, who said the French economy could ‘shrink 8% this year’.
Anne-Laure Delatte, an economist at the French CNRS commented:
‘There’s an overall consensus among economists that the recession will be worse than in 2008… People stop consuming and companies stop investing. It’s a vicious circle that amplifies the crisis and makes this a problem that is very difficult to address.’
EUR/USD Forecast: Could the Euro Rise as Europe’s Covid-19 Crisis Plateaus?
US Dollar (USD) investors will be looking ahead to tomorrow’s release of the US Retail Sales report for March. However, as retail sales are expected to plunge after America entered its first battle with the coronavirus and saw widespread state-by-state lockdowns.
We could see the ‘Greenback’ continue to fall if China’s economy continues to recover as Asian markets reopen after the nation’s earlier developments with coronavirus. As a result, investors will be seeking out riskier assets and shunning safe havens like the ‘Greenback’.
The EUR/USD exchange rate will remain sensitive to coronavirus developments this week, with any further signs of Europe’s death toll decreasing in places like Spain and Italy providing a boost for the single currency.