- Euro (EUR) slips on risk off trading as coronavirus fears dominate
- Investors look ahead to ECB monetary policy decision next week, no action is expected
- US Dollar (USD) rises on safe haven flows as new coronavirus cases reach a record high
- US Producer prices and covid-19 statistics in focus in what is expected to be a quiet session
The Euro US Dollar (EUR/USD) exchange rate is extending losses for the second consecutive session. The pair settled on Thursday -0.4% at US$1.1283.
At 07:15 UTC, EUR/USD trades -0.2% at US$1.1260. This is at the lower end of the daily traded range amid risk off trading.
Concerns over the rising number of coronavirus cases in the US and its potential to undermine the fragile economic recovery is dragging on the Euro whilst boosting the safe haven US Dollar. The number of new daily coronavirus infections reached a new record, topping 60,000. Investors fear that the US could be forced back into lockdown in a bid to control the spread of the virus.
With US medical facilities coming under mounting pressure, investors shrugged off improving jobless claims data on Thursday. The number of Americans signing up to unemployment benefit for the first time dropped to a 4-month low last week at 1.3 million, down from 1.4 million. Continuous claims also beat forecasts at 18 million. However, with new shutdowns and the rolling back of easing measures being announced, these numbers could deteriorate in the coming weeks.
The US economic calendar is looking pretty quiet, with just US producer price inflation on the docket. Analysts are expecting inflation at factory level to increase an unremarkable 0.1% month on month in June after falling -0.1% in May.
The Euro dropped in the previous session as sentiment dominated and investors shrugged off a better than forecast German trade surplus.
Today there is no high impacting Eurozone data due for release. Investors will look ahead to the European Central Bank’s rate decision. The central bank is expected to press the pause button on monetary policy as the ECB returns to its wait and see mode, assessing economic data before taking any further action.