Better than forecast German retail sales data is helping the Euro higher in early trade on Thursday. The Euro US Dollar exchange rate is extending gains from the previous session, which saw it settle up 0.5% at US$1.0875.
At 08:15 UTC, EUR/USD is trading +0.05% higher at US$1.0879 as investors look ahead to a packed day on the Eurozone economic calendar and the rate announcement from the European Central Bank.
ECB Expected To Announce New Supportive Measures
The Euro cautiously advanced after data from Germany’s Destatis revealed that retail sales declined -5.6% month on month in March, better than the -7.8% slump than analysts had forecast. Still, this was the fastest decline in retail sales since January 2007, as shops remained closed in lock down to prevent the spread of coronavirus. The data comes after Germany’s economy minister warned that the covid-19 pandemic would plunge the German economy into the deepest recession since World War 2.
Data releases from the Eurozone will continue to come thick and fast across the session, with Eurozone inflation, GDP and German inflation among the high impacting releases in focus.
Investors will also look ahead to the European Central Bank’s monetary policy announcement. The ECB are not expected to adjust interest rates. However, they are expected to reveal new measures to cushion the Eurozone economy from the coronavirus hit. This could include expanding the recently announced €750 billion bond buying programme to include junk bonds.
US Jobless Claims To Hit 30 million
The US Dollar is holding up on Thursday as investors digest comments by the Federal Reserve and President Trump.
As expected, the Federal Reserve kept interest rates on hold at 0%. The Fed gave a downbeat assessment of the risks to the US economy and said that it would keep rates at 0 until the US labour market shows signs of recovery. The Fed’s comments dragged on the US Dollar.
Negativity from the Fed is being balanced out by increase in safe haven flows after President Trump criticised China’s handling of the coronavirus, whilst accusing Beijing of doing anything to prevent him from being re-elected.
Investors will now look ahead to the release of US initial jobless claims. Analysts are expecting an additional 3.5 million Americans to have signed up for unemployment benefits. This would take the total to 30 million in just 6 weeks. A weak reading to drag on the US Dollar.
