The Euro US Dollar (EUR/USD) exchange rate has strengthened this morning after the latest industrial production figures from Germany rose more than expected.
At the time of writing the EUR/USD pairing are trading at around $1.2078 as US Dollar investors await the latest non-farm payrolls data for April.
Euro (EUR) Supported by German Industrial Production Data
The Euro is being supported against the US Dollar this morning after industrial production in Germany, the Eurozone’s largest economy, increased during March.
A better-than-expected rise of 2.5% suggests that the recovery in the manufacturing sector is gaining momentum.
The Eurozone has been fighting back from a third wave of coronavirus over the last month, and investors are becoming increasingly optimistic over the bloc’s economic recovery.
A ramped up vaccination rollout and tougher restrictions appear to have offset the worse of the third wave.
It comes as German health ministers have agreed to allow adults of all ages to receive the Oxford-AstraZeneca vaccine, no longer restricting it to people aged 60 or over, dismissing safety concerns.
US Dollar (USD) Awaits Non-Farm Payrolls for April
After initial US jobless claims yesterday showed a drop below 500,000 for the first time since the pandemic began investors have been patiently awaiting the latest non-farm payrolls data released later today.
It is expected that the US economy will have brought back the most jobs since August 2020 during April, with payrolls jumping by almost 1 million and the unemployment rate improving to a new pandemic-era low.
Nomura chief economist Lewis Alexander has commented on the non-farm payrolls expectations, saying:
‘Re-opening activity spurred increased spending on leisure and hospitality over March and early April, likely translating into a strong increase for food services and accommodation employment. Moreover, a broad range of labor market indicators — jobless claims, business and consumer surveys — suggest solid improvement in conditions.’
Euro US Dollar Exchange Rate Outlook: Eurozone Economic Sentiment in Focus
Heading into next week, Euro traders will be looking towards the latest ZEW economic sentiment index for May from the Eurozone.
Economic sentiment if forecast to have fallen to 55 as fears still mount over the coronavirus pandemic which could damage the Euro’s strength.
Euro traders will also keep an eye on the final German inflation rate for April which is forecast to have risen to 2%, which could provide much needed support for the single currency.
US Dollar investors will be focusing on the latter half of the week and the latest jobless claims and retail sales data from the US which if continue to show a swift recovery from coronavirus could see the US Dollar head higher.