- 2nd wave coronavirus fears persist
- Eurozone economic calendar light after weak inflation data yesterday
- jobless claims expected to show a slow improvement in the labour market
- Euro US Dollar exchange rate mildly higher at $1.1250
After two consecutive sessions in the red, the Euro is attempting to pushing higher versus the US Dollar on Thursday. The Euro US Dollar exchange rate settled in Wednesday -0.1% at US$1.1244.
At 07:15 UTC, EUR/USD is trading +0.05% at US$1.1250 despite a broad risk off tone in the market and as investors look ahead to US jobless claims data later today.
Risk aversion continues for a second session amid persistent fears over a second wave of coronavirus infections. The number of coronavirus cases in some US states such as California and Texas continue to rise to record daily levels.
Chinese authorities have also locked down parts of Beijing in an attempt to control the spread of covid-19. The second wave has come just as China is reigniting its economy. Investors fear that the outbreak could de-rail an already very fragile economic recovery, which is weighing on risk sentiment, boosting the safe haven US Dollar, whilst dragging on riskier currencies.
The Eurozone economic calendar is light today, with just the release of the European Central Bank’s economic bulletin. Yesterday the Euro slipped after data revealed that inflation in the Eurozone declined -0.1% month on month in May, down from 0.3% increase in April. The figures were in line with analysts’ forecasts as demand for non-essential goods evaporated and fuel prices slumped in lockdown.
Looking ahead US Dollar investors will turn their attention to jobless claims data. Analysts are expecting jobless claims to increase by 1.3 million, down from 1.5 million the previous week. Whilst this will be the lowest increase in jobless claims in 3 months, it is still 6 times the pre-coronavirus level in February.
Continuing claims, which provide a clue as to how quickly Americans are being re-hired as states gradually re-open will also be watched. Analysts are forecasting 19.8 million for continuing claims, down from 20.9 million. This is still a frustratingly slow pace and would dampen hopes of any quick economic rebound.
