GBP/EUR: Pound Snaps 3 Day Winning Streak vs. Euro

The Euro is extending losses versus the stronger US Dollar for a second straight session.

The Euro versus US Dollar exchange rate settled on Wednesday at US$1.0909, 0.66% lower on the day, after dismal US corporate earnings and dire economic data boosted the greenback’s safe haven appeal.

At 08:15 UTC, EUR/USD is trading 0.3% lower at US$1.0881 as investors digest the latest coronavirus statistics and look ahead to US initial jobless claims.

Eurozone Industrial Production In Focus

The Euro is trading on the back foot after coronvirus statistics in Europe gave few reasons to cheer. France recorded its worst daily death toll so far, whilst fatalities in Spain jumped to the highest level in 6 days. In terms of exit strategies, Germany will allow small shops to open next week and schools to return in early May.

German inflation data came in as expected. Consumer prices increased 0.1% month on month in March as forecast. On an annual basis the level 1.4% increase was recorded, well below the 2% target.

Attention will now turn to eurozone industrial production. Analysts are expecting industrial production to have slipped -0.2% month on moth in February. This would point to ongoing weakness in the sector even prior to the coronavirus outbreak escalated.

US Initial Jobless Claims To Increase By 5.1 Million

The US Dollar has been in demand over the past 36 hours owing to its safe haven properties. US earning season is bringing disappointing corporate results as the coronavirus impact starts to show through. Meanwhile US retail sales plunged by 8.7% in March, the most since record began in 1992 as the lock down takes its toll. The data highlights the scale of the collapse in consumer demand as people stay at home. The data has raised fears that the economic hit from the lock down could been more server than initially thought.

Attention will now turn towards US initial jobless claims due for release later today. Analysts are expecting an additional 5.1 million Americans signed up for unemployment benefits. This would take the total to over 21 million or 13% of the workforce in just 4 weeks. A weak figure could see demand for the safe haven US Dollar rise.