The Euro US Dollar exchange rate is benefiting today following on from positive Eurozone PMI data released earlier this morning.
At the time of writing, the Euro US Dollar pairing are trading at around $1.1985 as markets await an update on President Joe Biden’s proposed infrastructure spending.
Euro (EUR) Investors Upbeat Following Eurozone Composite PMI
The Euro found itself steadily rising against the US Dollar today following a positive composite PMI from the Eurozone for March.
The Eurozone composite PMI edged up to 53.2 points during March, the highest level since July 2020, and the second-fastest increase in private sector output in two-and-a-half years.
Chris Williamson, Chief Business Economist at HIS Markit commented on the latest PMI saying:
‘Eurozone business activity bounced back in March, returning to growth after four months of decline with an even stronger expansion than signalled by the forecast-beating ‘flash’ data. Manufacturing is booming, led by surging production in Germany, and the hard-hit service sector has come close to stabilizing as optimism about the outlook improved further during the month.’
Furthermore, reports from the European Commission that all adults in the EU’s countries will be offered a dose of the coronavirus vaccine by the end of June has caused investors to become cautiously optimistic.
Even more so, the Euro has found support against the US Dollar today as the negative correlation between the pairing has benefited EUR heading into the afternoon.
US Dollar (USD) Limited as Investors Await Latest Federal Reserve Minutes
The US Dollar is struggling against the Euro today as investors await the latest minutes from the Fed and an update from President Joe Biden on his proposed infrastructure spending.
This evening will see the latest Federal Open Market Committee minutes released, where US Dollar investors will be looking towards any information surrounding the Fed’s stance on rising inflation and forward guidance.
Even more so, an update is expected from President Joe Biden on his proposed infrastructure spending after the stimulus was shut down by both Democrats and many corporations in the US, Neil Bradley chief policy officer at the Chamber of Commerce said”
‘This plan would make America less competitive, which would mean less U.S. economic growth and less job creation. The benefits of infrastructure would be offset by punitive tax increases. And if they move ahead with only Democratic votes, the concept of doing anything on a bipartisan basis would be over and it would just reinforce the kind of gridlock that has prevented progress on every other issue.’
Euro US Dollar Exchange Rate Outlook: US Jobless Claims in Focus
For US Dollar investors, tomorrow sees the release of the latest US jobless claims for the week ending April 3rd.
If the figure meets forecasts of 675k, vastly lower that last week’s figure, it would provide support for the US Dollar in the latter half of the week.
For Euro traders, tomorrow’s Eurozone construction PMI for March is expected to have edged up 7 points, and take the Eurozone back into growth territory which would add increased support to EUR.
The EUR/USD exchange rate will continue to be driven by any further updates surrounding Joe Biden’s proposed infrastructure spending and the general market mood heading into the second half of the week.