- Euro (EUR) supported as German factory orders jump +27.9% vs 10% forecast
- Eurozone retail sales returned to pre-coronavirus levels in June
- US Dollar (USD) trades lower amid growing fears over the health of the US labour market
- Initial jobless claims expected to show a very small decline to 1.41 million vs 1.43 million last week
The Euro US Dollar (EUR/USD) exchange rate is extending gains for a third consecutive session. The pair settled on Wednesday +0.5% at US$1.1863 after briefly piercing US$1.19 for a second time in over two years.
At 07:15 UTC, EUR/USD trades +0.2% at US$1.1882. This is at the top end of the daily traded range.
Euro data remains supportive of the Euro. In Germany factory orders soared in June, jumping 27.9%, well ahead of the 10% gain expected. The data provided hope that the eurozone’s largest economy could be recovering more quickly than expected from the coronavirus crisis.
This data comes following yesterday’s service sector PMI’s, which mainly surprised to the downside. However, retail sales beat forecasts as consumers returned to the high street.
Eurozone retail sales surged back to pre-covid levels in June. Fuel, clothing and footwear sales all increased. Meanwhile, online sales slipped after 4 months of gains. This suggests that the consumer is returning to the high street, as the recovery in the bloc continues.
The US Dollar is trending lower versus its major peers on Thursday as concerns grow that the rising levels of coronavirus infections could result in the US economic recovery lagging that of other countries. The US Dollar experienced its worst monthly performance in 10 years in July on these fears and so far, the same fears are accompanying the US Dollar into August.
Data on Thursday was mixed. ADP private payrolls revealed that the US private sector’s labour market saw its recovery stall in July. However, the ISM non-manufacturing PMI showed that the dominant service sector gained momentum. Delving deeper into the numbers, new orders soared to a record high. However, worryingly, the employment component declined.
Attention will now turn to the US jobless claims numbers. Analysts are expecting the number of people signing up for unemployment benefits for the first time to be 1.41 million, down very mildly from 1.43 million last week. Such a small drop would add to evidence that the labour market recovery is stuttering ahead of Friday’s non-farm payroll report.