The Euro US Dollar (EUR/USD) exchange rate is steady this afternoon after the European Central Bank (ECB) kept interest rates at a record low of 0% as expected.
At the time of writing the EUR/USD pairing are trading at around $1.2055 as the US Dollar is supported by the latest US jobless claims data.
Euro (EUR) Supported by ECB Interest Rate Decision
The Euro is being supported against the US Dollar this afternoon following the latest interest rate decision from the ECB.
The ECB has continued to keep its stimulus measures to help the Eurozone recover from the coronavirus pandemic, and leave rates unchanged at 0%.
The ECB has also pledged to continue to buy up government bonds through its pandemic emergency purchase programme (PEPP) at a faster pace to help support the recovery of the economy.
Melissa Davies, chief economist at Redburn, was cautious surrounding the ECB’s latest policy decision saying:
‘The ECB confirmed its current policy stance today, with rates on hold and QE asset purchases temporarily boosted during this quarter. But with Eurozone credit conditions tightening and governments’ grip on the virus in question, observers may wonder whether the ECB has anything left in the cupboard to deal with negative risks to growth and inflation.’
‘Any increased Covid restrictions and the risk of winter lockdowns point to the need for the ECB to do more, rather than less, in the coming months.’
US Dollar (USD) Supported by Unexpected Fall in US Jobless Claims
The US Dollar has found support following a better-than-expected initial US jobless claims for the week ending Apr 17th.
US Jobless claims were forecast to rise to 617k but instead fell 547k, a new low for the coronavirus pandemic era.
Despite the fall, the numbers highlight the unemployment problem in the US as there are still over 8 million fewer America’s working prior to the start of the pandemic.
Daniel Zhao, senior economist at jobs website Glassdoor commented on the fall saying:
‘We’re still pretty deep into the hole created by the pandemic. But at the same time, there is more optimism now than at any other point in the pandemic.’
Euro US Dollar Exchange Rate Outlook: Flash PMI Data in Focus
For both Euro and US Dollar traders, flash PMI data for April from the Eurozone and the US are hoped to show an insight into how the respective economics are performing as they recover from the coronavirus pandemic.
It’s thought the PMI’s will show a sustained growth as the countries reopen from the coronavirus pandemic.
The EUR/USD exchange rate will continue to be driven by any further coronavirus developments in the coming days.
Euro investors will hope that the ramped up coronavirus vaccine rollout across Europe is sustained in the coming months.