- Euro (EUR) rises amid upbeat mood in the market
- Investors shrugging off rising cases & a tightening of restrictions in Germany
- US Dollar (USD) eases on safe haven outflows
- Strong data from China & Japan also lifting the mood
The Euro US Dollar (EUR/USD) exchange rate is edging higher at the start of the new week extending gains for a third straight day. The pair rallied 0.25% settling on Friday at US$1.1832 towards the low of the day. At 07:15 UTC, EUR/USD trades +0.3% at US$1.1864.
The mood on the market is upbeat which is lifting the Euro versus the safe haven US Dollar. Optimism surrounding a covid vaccine continues to buoy the market after Pfizer reported last Monday that its vaccine candidate produced with BioNTech was found t be 90% effective in Phase 3 clinical trials.
Moderna a US drug market is due to report its findings from its Phase 3 clinical trials this week, investors are optimistic that the results will be equally as encouraging.
The upbeat mood over a covid vaccine is overshadowing concerns over surging covid cases. German is considering tightening its light national lockdown. Furthermore, Germany’s economic minister warned that Germany must live with restrictions for a further 4 -5 months.
Whilst there is no high impacting Eurozone data due for release today investors will be watching comments from European Central Bank policy makes closely. The ECB is widely expected to ease monetary policy further in December.
Rising risk appetite is dragging on demand for the greenback at the start of the new week. In addition to vaccine optimism, strong data from Asia is also lifting the mood in the market.
Retail sales in China rose at the fastest rate of the year in October, a strong sign that improving consumer demand is contributing to the economy’s solid economic recovery from the covid pandemic. Sales rose an impressive 4.3% MoM, well ahead of the 3.3% increase recorded in September. Retail sales returned to growth in August after 7 consecutive months of decline.
Adding to the upbeat mood data revealed that Japan’s economy rebounded sharply in Q3 with the economy growing by 5% QoQ, ahead of the 4.4% forecast, boosting the world’s third largest economy out of recession.