- Euro (EUR) benefits from improved sentiment after second wave fears dragged on the mood most of the week
- EU leaders will try to agree on economic recovery plan
- US Dollar (USD) slips after strong week, Fed Powell to speak again
- Euro US Dollar exchange rate (EUR/USD) holds $1.12
After three consecutive days of losses, the Euro is edging higher versus the US Dollar in early trade on Friday. The Euro US Dollar exchange rate settled -0.3% at US$1.1204 on Thursday.
At 07:15 UTC, EUR/USD is trading +0.15% at US$1.1215. This is at the upper end of the daily traded range as the pair picks up from a 2 week low struck in the previous session.
The broad mood in the market has improved slightly after a week which has seen concerns over a second wave of coronavirus infections overshadow optimism surrounding a quick economic recovery from the coronavirus crisis.
Despite flare ups in Beijing and parts of Europe, investors are calmer today as authorities act quickly to stem the spread of the virus.
The improved mood is seeing demand for riskier currencies rise, whilst the safe haven US Dollar is edging lower.
Today investors will look ahead to the start of the European Union Summit, where the 27 leaders will meet and try to narrow their differences on the European economic recovery plan. Investors have already priced in a deal here so any negative headlines could drag on the currency.
Safe haven US Dollar is edging lower on Friday after a strong showing across the week. Concerns over a second wave de-railing the fragile economic recovery from the pandemic boosted safe haven demand this week.
Weaker than forecast US jobless claims data on Thursday also increased demand for safe haven assets and currencies. US initial jobless claims increased by 1.5 million, ahead of the 1.3 million forecast and only marginally down on 1.59 million recorded the previous week. Continuous claims were also higher than expected.
The data shows that the recovery in the US labour market will be a long slow road, dampening hopes of a quick economic rebound.
Federal Reserve Chair Jerome Powell will speak again today. After two appearances already this week he is not expected to add anything new.
