The euro was higher against the dollar on Friday.
- French and German coronavirus cases highest since reopening
- Eurozone GDP -12.1%, France inflation 0.9%
- US retail sales miss expectations, consumer sentiment improves
EUR/USD was higher by 38 pips (+0.32%) to 1.1849 as of 4pm GMT. This week the euro-dollar exchange rate gained +0.49%.
The currency pair dropped below 1.18 early on but then went on to push forward to 1.185, closing near highs of the day.
EUR: Euro gains despite new travel restrictions
Virus statistics and the improving chance of a vaccine are the two swing factors driving overall risk sentiment and demand for the euro. While virus cases have been on the rise amid summer travel, more progress is being made towards a vaccine, with Russia the first to approve one for use this week.
In Germany and France, virus cases have been shooting higher. Germany reported its highest number of cases since May and France added 2,524 new cases in 24 hours, again the highest since it reopened from lockdown in May. The UK took the step of adding France to the list of countries where visitors will be required to quarantine for 14 days.
Europe’s recession was confirmed in the second GDP reading for Q2 at -12.1%. The euro mostly shrugged off France consumer price inflation (CPI) rising by 0.9% in July, unchanged from June.
USD: Trump signal direct payments coming
Having been treading higher for most of the day, the greenback turned lower in late trading as confusion over the state of the US China trade deal and the next coronavirus relief package by Congress took hold. The trade review scheduled for tomorrow has been delayed, presumably because of the deteriorating relations between the two nations. Donald Trump seemed to add to the uncertainty by saying he plans to send direct checks to Americans, circumventing Congress.
The headline number missed expectations but sales excluding automobiles (ex-autos) saw a bigger rise than expected, and the number for June was revised up. There was a deceleration from the June figures overall, but that was to be expected since a lot of the rise in June was pent up demand from during the lockdown.
