Euro to US Dollar Exchange Rate’s Broad Fluctuations Continue amid Dire Data
Following last week’s impressive surge, the Euro to US Dollar (EUR/USD) exchange rate slumped this week. It marks the fourth week in a row that the pair has seen massive fluctuations, as the coronavirus pandemic dominates markets.
EUR/USD has been able to avoid losing all of last week’s gains, but it has still seen significant losses this week overall.
EUR/USD opened last week at the level of 1.0754 and gained almost four cents to close the week at 1.1149.
This week EUR/USD has once again fallen back down into the region of 1.07. The pair is trending at around 1.0798 at the time of writing on Friday.
Market risk-sentiment rose again this week as the coronavirus pandemic worsened around the globe. None of the week’s fiscal stimulus news was particularly impressive, meaning investors held on to safe havens like the US Dollar.
Euro (EUR) Exchange Rates Lack Appeal amid EU Disagreements and Bleak PMIs
It’s been a bearish week for the Euro. As EU nations have still been unable to reach agreements over proposed ‘coronabonds’, Euro investors have become more anxious about the impact of the coronavirus pandemic in Europe.
With the EU’s fiscal stimulus outlook still uncertain, the shared currency was hit harder by the Eurozone’s latest dire economic data.
Last week saw the publication of the Eurozone’s final March PMIs. The data showed an even deeper than feared impact from the coronavirus, and many of the prints marked the worst on record.
Analysts are beginning to note that big recessions across the bloc are now a given.
Europe's economy's in free fall due to Coronacrisis. PMI's all registered record declines in activity, w/Italy and Spain experiencing the sharpest reductions. Pointing to massive recessions in the countries. https://t.co/wuoM9Efay5 pic.twitter.com/4VfLq2fzBU
— Holger Zschaepitz (@Schuldensuehner) April 3, 2020
US Dollar (USD) Exchange Rates Benefitting from Safe Haven Demand despite Shocking Data
The US Dollar has been pretty resilient over the past week, even as the US economic outlook also takes a turn for the worse.
As a safe haven currency, the US Dollar has been champion amid the global panic over the coronavirus pandemic. Safe haven demand has kept USD climbing over the past week.
Still, the US Dollar may have climbed even higher this week if it was not weighed by the week’s shockingly bad US jobs data.
Thursday’s US jobless claims stats were called one of the worst single ecostat figures of all time after the print showed over 6 million jobs had been lost.
Euro to US Dollar (EUR/USD) Exchange Rate May Struggle to Advance Much
While the Euro to US Dollar (EUR/USD) exchange rate has been up and down over the past half a month, it may struggle to advance again in the coming week.
The US Dollar continues to see a resilient demand as a safe haven currency, even as US data shocks markets. This is partially because data has been awful across the globe.
According to a note from Commerzbank, the US Dollar may still have further strength left in it due to this safe haven demand.
‘These global recession fears are terrifying the markets – presumably without much differentiation between the countries. Which is why the Dollar is standing up rather well and might be able to appreciate a little bit more’
On the other hand though, the US Dollar’s gains may be limited if poor US data continues to weigh on the currency’s outlook.
Global markets may also be a little less eager to buy safe havens if there is any fresh fiscal stimulus that impresses.
Euro investors are eagerly awaiting developments on EU ‘coronabonds’ for example. Positive news here could boost Euro to US Dollar (EUR/USD) exchange rate gains in the coming week.