The Euro is mildly lower versus the US Dollar in early trade on Monday, adding to losses from last week. The Euro US Dollar exchange rate dropped -1.3% across the previous week, closing on Friday at US$1.0841.
At 08:15 UTC, EUR/USD is trading down -0.1% at US$1.0828. This is at the lower end of the daily traded range of US$1.2825 – US$1.02851, although the pair remains within a familiar range as investors continue to brush off horrible US jobs data and amid European reopenings.
German R Rate Back Above 1
France, Spain and other European countries are taking additional steps to ease lockdown restrictions as coronavirus statistics continue to improve on the continent. Germany is proving to be a point of concern as the R number, the reproduction number, has pushed back over 1, raising fears that the Eurozone’s largest economy could have eased its lockdown measures too soon. The prospect of Germany once again implementing more restrictive measures is dragging on demand for the euro.
Also keeping pressure on the euro are threats from the European Commission that it will sue Germany over the German constitutional court’s recent ruling. Last week, the German court questioned the legality of part of the European Central Bank’s quantitative easing programme.
ECB President Christine Lagarde remains committed to doing whatever is necessary to cushion the economic blow from the coronavirus. However, the prospect of an institutional showdown in the region as it heads into its deepest recession for a century is pulling on the value of the common currency.
US Dollar Brushes Off 14.7% Unemployment
The US Dollar is trading flat versus its peers at the start of the new week as it continues to shrug off awful jobs data. On Friday, data revealed that 20.5 million US jobs were lost in April and the unemployment level reached 14.7%. This was actually slightly better than the 16% unemployment rate that many analysts had feared.
With no high impacting US data due to be released today, the focus remains firmly on the reopening of the US economy as President Trump urges people back to work. States continue to make preparations for an imminent resumption of economic activity, albeit at a gradual pace.
Looking ahead across the week, US inflation data, Federal Chair Jerome Powell’s testimony and initial weekly claims will be closely monitored.
