The Euro is extending gains versus the US Dollar in early trade on Good Friday. The Euro US Dollar exchange rate rallied 0.6% across the previous session settling on Thursday at US$1.0923 following support from the Federal Reserve and the Eurogroup.
At 08:15 UTC, EUR/USD is trading +0.5% at US$1.0950, this is the upper end of the trading range of US$1.0919- US$1.0952. The Euro is on track to gain 1.6% versus the greenback across the week.
Euro Lifts As Eurogroup Agree Rescue Package
The Euro is pushing higher in light trade on Friday after the Eurogroup of finance ministers finally reached an agreement on a Eurozone wide coronavirus rescue package, after weeks of disagreement.
Up until now individual governments within the eurozone have announced their own national rescue packages, differing in size but broadly following the same form with guarantees, liquidity support, work schemes and fiscal stimulus. The €540 billion deal agreed yesterday adds to this. The package includes accessing credit lines from the eurozone bailout fund with minimal conditions, boosting the lending capacity of the European Investment Bank and a new European Commission proposed unemployment insurance scheme.
The agreement has added to the enormous amount of stimulus already in place to fight the economic consequences of the coronavirus in the eurozone, lifting demand for the common currency.
US Dollar Slips On More Fed Support
The US Dollar has traded on the back foot across the week amid growing optimism that the coronavirus outbreak could soon be reaching its peak and amid further support for central banks.
The Federal Reserve announced that it could pump an additional $2.3 trillion into the economy through new and expanded programmes and measures. The announcement shows the Fed is ramping up its already very extensive efforts to support companies through the coronavirus crisis.
Today investors will look ahead to US inflation data for March. Analysts are expecting consumer prices to decrease -0.3% month on month in March, down from a 0.1% expansion in February. On an annual basis inflation is expected to increase just 1.6% year on year, down from 2.3% owning to tumbling oil prices and a steep drop in consumption.
