- Euro (EUR) slips as EU Summit draws into focus
- German covid numbers remains at record high
- US Dollar (USD) calm in the face of Fed – White House spat
The Euro US Dollar (EUR/USD) exchange rate is trending lower on Friday paring gains from the previous day. The pair settled +0.2% higher on Thursday at US$1.1873 just off the high of the day. At 10:15 UTC, EUR/USD trades -0.1% at US$1.1858. The pair is on track to book mild gains of 0.2% across the week after declining -0.3% the week before.
The Euro managed to advance in the previous session but that was mainly thanks to a weaker US Dollar. France could be looking to ease some of its lockdown restrictions which offered some support. However, Germany, the largest economy in the eurozone is seeing its covid numbers hold near record highs which is bad news for the Euro.
The EU summit is in focus. Brexit and budget infighting are expected to dominate. The European Council president Ursula von der Leyen warned that the EU faces serious obstacles to approving a €1.8 trillion budget package after Poland and Hungary vowed to veto. Both nations have concerns on the conditions. This appears to be the most immediate threat to the Euro, although investors seem fairly confident that it
The US Dollar is holding steady versus its major peers after rallying in the previous session on safe haven flows. The greenback rose on Thursday inline with growing concerns over a second wave of covid infections and the impact of tightening lockdown restrictions.
US jobless claims unexpectedly rose, reflecting the impacting that tightening lockdown restrictions are having on the US labour market.
The US Dollar has remained steady as a spat develops between the US Federal Reserve and the US Treasury. US Treasury Secretary Steve Mnuchin wrote to the Fed Chair pulling the plug on some pandemic lending programmes, potentially adding stress to the economy.