EUR/USD Exchange Rate Despite Rebounding German Retail Sales Data
The Euro to US Dollar (EUR/USD) exchange rate dipped today, with the pairing currently trading around $1.205.
The Euro (EUR) failed to rise against the ‘Greenback’ today despite Germany’s Retail Sales report beating forecasts and rising by 8.2% year-on-year.
Analysts at Reuters commented on the data:
‘The better-than-expected retail sales data followed bullish job market data which showed on Tuesday that unemployment fell further in November despite the partial lockdown.
‘But a gloomy consumer sentiment survey released by the GfK institute last week suggests the resilient labour market will not automatically translate into higher household spending at the end of the year.’
With the Eurozone’s economy expected to deteriorate owing to Europe’s partial Covid-19 lockdowns, EUR investors are remaining cautious.
Meanwhile, EUR traders are, however, becoming more optimistic about the outlook for the Eurozone’s economy following news of a Covid-19 vaccine rollout.
Us Dollar (USD) Rises Despite Sinking Demand for Safe-Haven Currencies
Despite the US Dollar’s (USD) largely downward trajectory this week, it has begun to pick up against the Euro.
US stimulus hopes have, however, begun to dampen demand for the safe-haven ‘Greenback’.
Speculation continues to grow over another round of US stimulus bolstering the world’s largest economy.
Consequently, risk sentiment has improved alongside hopes of a rollout of Covid-19 vaccines through Europe, the UK, and America in the next few weeks.
US Federal Reserve Chairman Jerome Powell was also more bullish about the US economy, saying that the recovery had been ‘faster’ than expected.
Mr Powell commented:
‘We’ll use our tools until the danger is well and truly passed, and it may require help from other parts of government as well, including Congress. We can see the end, we just need to make sure we get there.’
Meanwhile, while the outlook steadily improves for the world’s largest economy – and hopes of a Covid-19 vaccine rollout increase – demand for the US Dollar has been compromised.
EUR/USD Forecast: Covid-19 Vaccine Rollout News Could Drag Down the ‘Greenback’ This Week
Euro (EUR) investors will be awaiting tomorrow’s release of the Eurozone’s Retail Sales report for October.
Any further signs that the Eurozone’s retail sales had risen in October could boost the single currency.
Tomorrow will also see the final release of German’s PMI Composite data for November.
If this shows an improvement in the Eurozone’s largest economy, we could see the EUR/USD exchange rate could head higher.
US Dollar (USD) investors will be awaiting tomorrow’s release of the US Initial Jobless Claims.
Any signs of US unemployment rising could spark concern for America’s economy and weigh on the ‘Greenback’.
However, news of the Covid-19 vaccine roll out will continue to drag down safe-haven demand for the ‘Greenback’.