The Euro is moving northwards in early trade on Monday as coronavirus cases fall in Europe and as countries gradually start easing restrictions. The move higher comes after the Euro US Dollar exchange rate declined -0.5% across the previous week, in its second straight losing week.
At 08:15 UTC, EUR/USD is trading +0.5% at US$1.0844, towards the upper end of the daily trading range of US$1.0812 – US$1.0859.
EUR/USD: Coronavirus Statistics Support Euro
The Euro is staging a solid rebound at the start of the week as coronavirus cases and fatalities dropped significantly in various European countries. Italy announced plans to ease lock down restrictions as from May 4th, whilst Spain permitted children to leave the house for the first time in 42 day. Germany also reported 1000 fewer cases on Sunday. These figures are helping to boost demand for the Euro on Monday.
However, analysts are expecting gains in the Euro to be capped by the fact that EU leaders failed to agree on a coronavirus recovery package for the bloc’s economy, which has been crushed by the coronavirus crisis.
There is no high impacting Eurozone data due for release today. Instead investors will look ahead to the European Central Bank’s monetary policy decision on Thursday and the release of GDP data on the same day.
The ECB is widely expected to up the size of its emergency bond buying package and keep pressure on European leaders for sizeable fiscal stimulus.
Steve Mnuchin Sees US Economy Rebounding
Demand for the safe haven US Dollar eased on Monday as the broader mood in the financial markets improved. Additional monetary easing from the Bank of Japan, combined with slowly improving covid-19 statistics are working to boost sentiment.
In the US the number of coronavirus cases has breached 900,000, whilst the death toll stands at 52,000. However, there are signs that the number of cases is easing, particularly in the deeply affected New York area.
Adding to the optimistic mood, US Treasury Secretary, Steve Mnuchin announced that he sees the US economy rebounding strongly in the third quarter of the year. He said he believes that the economy will bounce back in July, August and September owing to the unprecedented amount of fiscal relief in the economy.
There is no high impacting US data due for release today. Investors will look ahead to consumer confidence figures due tomorrow and Wednesday’s Federal Reserve monetary policy announcement and GDP release.
