EUR/USD: Pair Pushed Over $1.09 On German Stimulus Hopes, Coronavirus Fears

The euro continues its ascent versus the US dollar. Today the common currency is on its fifth consecutive session of gains versus the greenback as coronavirus fears are once again boosting expectations of a Federal Reserve rate cut, and amid German stimulus hopes.

The euro to US dollar closed the previous session 0.05% at US$1.0886.

At 08:00 UTC EUR/USD is trading 0.38% higher at US$1.0920 at the top end of its range for the day.

Germany To Ease Strict Fiscal Spending Rules?

The euro is finding support on news that Germany’s Finance Minister, Olaf Scholz, is considering easing fiscal spending restrictions in order to support local governments as they struggle to service debt and to boost the flagging economy. This would be a big shift in fiscal policy in the eurozone’s largest economy witch stagnated in the fourth quarter of last year.

The news comes after European Central Bank President Christine Lagarde in addition to a chorus of economists and business leaders have urged Angela Merkel to take advantage of historically low interest rates and increase spending.

Today investors will now look ahead to business confidence data. Analysts are expecting economic confidence to have ticked lower to 102.6 in February, down from 102.8.

Dollar Dives On Unconfirmed Origin Of A US Coronavirus Case

The dollar is falling in early trade on Thursday as coronavirus fears grow. The first coronavirus infection of unknown origin was confirmed in the US, heightening concerns of a pandemic and the impact on the US economy. Treasury yields crashed to a record low as investors questioned how prepared the US was to handle a widespread outbreak of the killer virus.

The dollar is not seeing safe haven flow at the moment as investors are now starting to price in a direct hit to the US economy. Once again investors are upping the odds of the Federal Reserve cutting interest rates in the event of a coronavirus inspired economic slowdown.

Today there are several high impacting US economic releases which could attract some attention. US durable goods are expected to decline -1.5% month on month in January, down from a 2.4% increase the previous month. This could drag the dollar lower. US GDP is expected to confirm 2.1% annual growth in the fourth quarter.

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