GBP/EUR: Pound Climbs Higher vs. Euro After Tory Conference
  • The US dollar witnessed some profit-taking.
  • The EUR/USD bounced from the two-month low.
  • Pandemic worries cap the upside move in the pair.

The EUR/USD hovered around the last close with minor fluctuations into positive and negative territory, while consolidating near its two-month lows. The coronavirus infection numbers triggered worries of a second wave and weighed on investor mood, and sent market participants to the US dollar in the early part of Thursday trading. The slowdown witnessed in European economic growth also added to the worries.

The headline German IFO Business Climate Index disappointed the market and recorded a reading of 93.4 in September. The Current Economic Assessment was at 89.2 this month compared to 89.5 expected and 87.9 earlier.

The US Initial Weekly Jobless Claims went up to 870K against an expectation of a fall to 843K from 866K in the earlier comparable period. The equity markets rebound also added to the pressure on the USD, helping the pair.

The fiscal stimulus hopes received a boost as the congress agreed to work together for a deal after months of impasse. Democrats are working on a 2.2 trillion dollars stimulus package, according to media reports. Also, there are reports that the House Speaker Nancy Pelosi would resume talks with the US Treasury Secretary Steven Mnuchin. But, the uplift in the risk sentiment pushed the US Treasury yields higher and supported the dollar.

In the Asian trading today, the EUR/USD rallied back around 60 pips from the day’s lows, but couldn’t attract further follow-through action and was trading in the mid-1.1600s. As the European economic docket is light today, the pair will depend on the dollar action for the trading direction. The release of Durable Goods Orders data will be eyed during the US session by the traders.