The Euro is trending lower versus the stronger US Dollar at the start of the new week. The Euro US Dollar exchange rate is giving back some of its 4.1% gains from the previous week.
At 08:30 UTC, EUR/USD is trading -0.6% lower at US$1.1070. This is at the lower end of its daily trading range so far today of US$1.1063 – US$1.1144. Investors are trading cautiously amid warnings that lock downs in Europe and US will be extended.
Eurozone Consumer Confidence To Plunge
The number of coronavirus cases in Italy reached just shy of 97,689 over the weekend, whilst the total number of deaths reached 10,779 on Sunday. However, the daily number of deaths was 756. This is the second consecutive day of falls, boosting optimism that Italy may have peaked.
Even so, the country looked almost certain to see an extension of the stringent lock down measures, which were due to expire on Friday 3rd April. Reports suggest that the lock down could be extended until 18th April, meaning a deeper impact on the eurozone’s third largest economy.
Today investors will look ahead to Eurozone consumer confidence data and German inflation figures. Analysts are expecting to see consumer confidence plunge as other measures of confidence have shown. Lower consumer morale means lower consumption which is bad news for the economy.
German inflation is also expected to drop to 0% month on month in March, down from 0.4% increase in February.
Trump Extends Stay At Home Guidance Until End April
The US Dollar was back in demand on Monday as hopes of a speedy end to the US shutdown which has paralysed the US economy were dashed. On Sunday, President Trump extended the restrictive social distancing guidelines until the end of April, just days after saying that the US would be open for business again after Easter.
Trump’s U -turn came after medical experts presented the President with dire projections for the pandemic in America. The stay at home extension increased risk aversion at the start of the week, sending investors in search of the safe haven US Dollar.
Whilst there is no high impacting US data due for release today. Investors will be watching PMI figures and the US non-farm payroll at the end of the week for further clues as to the economic impact of the virus.
