GBP/EUR: Pound Steady A Boris Johnson Switches Attention To Policies
  • Euro (EUR) rally loses steam amid rising covid concerns
  • Eurozone consumer confidence in focus
  • US Dollar (USD) trades muted ahead of US Trump – Biden debate
  • US fiscal stimulus optimism lingers

The Euro US Dollar (EUR/USD) exchange rate is extending gains on Tuesday for a third straight session. The pair settled on Monday 0.25% higher at US$1.1664, close to the high of the day. At 08:15 UTC, EUR/USD trades +0.1% at US$1.1681, at the high of the day.

The mood in the market has turned sour as the number of coronavirus death across the globe reaches 1 million. The Euro is struggling to make gains as fears over rising coronavirus infections in the eurozone drag on sentiment. As cases increase expectations are also rising that tighter restrictions will be put in place to stem the spread of the virus. Germany’s Chancellor Angela Merkel is, according to Bloomberg, considering limiting gatherings to tackle the spread of the virus.

Tighter restrictions are already hampering business activity in the region, as seen in the PMI data last week. Fears are growing that this will worsen over the coming months.

Attention will now turn to Eurozone consumer confidence. The data is expected to show the sentiment actually ticked higher. A strong reading could be some welcome good news for the Euro. However, any signs of weakness could unnerve investors sending the common currency lower.

The US Dollar is attempting to claw back lost ground on Tuesday although trade remains fairly muted ahead of the Trump – Biden Presidential debate later today. The debate will be closely watched given the limited visibility of the candidates so far owing to covid restrictions. Campaigning has been signififcsntly more low key than usual. So, the markets will use this as a window to understand more particularly about Biden.

US fiscal stimulus hopes are also driving the US Dollar. Optimism of a fiscal stimulus deal between the Democrats and Republicans had risen on Monday boosting riak appetite and dragging on the US Dollar.