EUR/USD Exchange Rate Rises on Renewed US Stimulus Hopes
The Euro US Dollar (EUR/USD) exchange rate rose today, with the pairing currently trading around $1.182.
The US Dollar (USD) fell following comments from the US House Speaker Nancy Pelosi, who said she was ‘optimistic’ about a pre-US election Covid-19 stimulus deal.
Pelosi’s Deputy Chief of Staff Drew Hammill commented:
‘The Speaker and Secretary Mnuchin spoke today at 2:00 p.m. by phone for 52 minutes. The Speaker is optimistic that an agreement can be reached before the election.’
In US economic data, today saw the release of September’s Durable Goods Orders, which beat forecasts and rose by 1.9%.
Oren Klachkin, the lead economist at Oxford Economics, commented:
‘The stronger-than-expected rise in durable goods orders in September is encouraging, but future gains will likely be more modest as the health crisis drags on the economic recovery.’
Consequently, demand for the safe-haven ‘Greenback’ has slipped owing to increasing signs that the US economy – the largest in the world – could be on the mend.
Euro (EUR) Edges Higher as Covid-19 Cases Increase Across Europe
The Euro (EUR) rose against the ‘Greenback’ despite growing concerns over Europe’s rising Covid-19 infections.
However, the single currency has continued to benefit from its negative-correlation to the ‘Greenback’.
In Eurozone economic news, today saw the Spanish unemployment figure jump over 16%.
Reuters commented on the data:
‘The rate does not include furloughed workers and other people who do not meet certain technical criteria, meaning the true figure is significantly higher.
‘The number of unemployed people in the country surged by 355,000 from the previous quarter to 3.72 million, marking the biggest quarterly jump since 2012, the data showed.’
As a result, EUR investors are becoming increasingly worried about the Eurozone’s economy.
Added to this, increasing lockdowns and curfews across Europe to tackle the Covid-19 pandemic are dragging down confidence in the bloc’s economic recovery.
EUR/USD Forecast: Could Rising Covid-19 Cases in Europe Drag Down the Single Currency?
US Dollar (USD) investors will be awaiting tomorrow’s speech from Robert Kaplan, the president of the Federal Reserve Bank of Dallas.
Any downbeat comments about the US economy could bolster demand for the safe-haven ‘Greenback’.
USD will be driven by US stimulus package news. If this seems more likely, then the US Dollar would suffer.
The EUR/USD exchange rate will continue to be driven by Europe’s Covid-19 situation. If cases continue to rise throughout the continent, then the single currency could fall.