- US Dollar under pressure as mood in the market improves
- Trump’s health is reportedly improving, and optimism grows surrounding a US fiscal stimulus deal
- Euro (EUR) advances despite rising covid cases & partial lockdown in Madrid
- Eurozone service sector PMI, sentiment data & retail sales up next
The Euro US Dollar (EUR/USD) exchange rate is trading mildly higher at the start of the new week adding to gains from the previous week. The pair settled +0.77% higher across the previous week, closing on Friday at US$1.1713, off the high of the week US$1.1770. At 07:15 UTC, EUR/USD trades +0.12% at US$1.1725.
The US Dollar is trading lower across the board as the mood in the market improves. Risk appetite is on the rise, weighing on demand for safe havens such as the US Dollar as President Trump’s health improves and amid growing optimism that a US stimulus package will be agreed.
Rumours are swirling that President Trump could be released from hospital as early as today after contracting Covid late last week. Trump was admitted to hospital on Friday, sending demand for the US Dollar surging on safe haven flows.
Adding to the upbeat mood were comments from House Speak Nancy Pelosi over the weekend, as she lifted expectations of an impending US stimulus package. Nancy Pelosi said that the two sides, the Democrats and the Republicans, were making progress towards a deal.
The upbeat mood which is dragging on the US Dollar is lifting the Euro. However, gains in the Euro could be capped as concerns surrounding rising numbers of covid on the old continent remain. The Spanish capital of Madrid has gone into partial lockdown after becoming Europe’s worst infection hotspot. Some 4.8 million residents will be barred from leaving the area.
European Commission President Ursula von der Leyen has also gone into isolation following exposure to the virus.
Looking ahead attention will be on the Eurozone economic calendar with the release of service sector PMI data, sentiment numbers and Eurozone retail sales data.
Retail sales could provide some support to the common currency. Expectations are for retail sales +0.9% month on month in August after falling -1.3% in July.