Euro to US Dollar Exchange Rate Strikes Best Levels in Over a Year
The Euro (EUR) outlook continues to improve and the US Dollar (USD) sees further and further pressure, so the Euro to US Dollar (EUR/USD) exchange rate has surged this week. Since yesterday, EUR/USD has struck highs not seen since 2018.
Since opening this week at the level of 1.1426, EUR/USD has trended with an upside bias.
The US Dollar’s rises were too brief to knock the pair lower and EUR/USD instead spent the middle of the week surging.
EUR/USD has gained over a cent, and yesterday the pair touched on a high of 1.1596. This was the best level for the pair since September 2018, almost two years ago. At the time of writing on Thursday EUR/USD is trending relatively closely to those highs.
Euro and US Dollar investors are awaiting more economic data due tomorrow, and coronavirus developments will remain highly influential as well.
Euro (EUR) Exchange Rates Appealing despite Mounting Economic Concerns
Investors continue to find the Euro one of the more appealing major currencies this week.
As the EU agrees to a sweeping Recovery Fund and rival currencies like the Pound (GBP) and US Dollar see fresh pressure, the Euro is benefitting from market sentiment.
This is despite rising fears over the long-term economic costs of the coronavirus pandemic. France’s Finance Minister said today that France’s economy would not return to pre-crisis levels until 2022.
The Euro’s appeals persist amid expectations that Europe could bounce back from the pandemic more strongly than other major economies.
Strong German confidence data, published this morning, also supported EUR.
US Dollar (USD) Exchange Rates Weak but Sees Hints of Safe Haven Support
Investors still have little reason to buy the US Dollar this week, with the currency’s outlook dominated by uncertainties.
The US coronavirus situation is still concerning markets amid surging infections and mixed economic data. Concerns about issues like US employment and retail activity only persist due to a lack of solid recovery signs.
This week, fresh hopes for US fiscal stimulus have also been doused. All these factors are leaving the US Dollar broadly unappealing.
The US Dollar’s appeal is limited even in times of safe haven demand. Rising US-China trade tensions have led to higher demand for safer currencies, but the US Dollar’s benefit from this has only been limited.
Euro to US Dollar (EUR/USD) Exchange Rate Awaits PMI and Coronavirus Developments
While it is unlikely to lead to a solid shift in movement for the Euro to US Dollar (EUR/USD) exchange rate, tomorrow’s PMI data will still be closely watched.
Markit’s July PMI projections for both the Eurozone and US will be published during Friday’s sessions.
If Eurozone PMIs beat forecasts, they may only further buoy the already appealing Euro outlook. Data would have to be shockingly weak to have a negative impact on the Euro.
The US data, on the other hand, may need to be highly impressive to offer the US Dollar any noteworthy support.
For USD, the US government’s stances and action on the coronavirus pandemic, as well as any possible stimulus news, is more likely to offer it support.
Overall, coronavirus and political developments will remain the biggest influence for the Euro to US Dollar (EUR/USD) exchange rate.