- Euro (EUR) rises after German GDP +8.5% vs 8.2% exp.
- German IFO 90 vs 87.2 exp although future expectations slumped
- US Dollar (USD) slips on safe haven outflows after Trumps admits defeat
- US Consumer confidence in focus
The Euro US Dollar (EUR/USD) exchange rate is pushing higher on Tuesday, paring losses from the previous session. The pair settled -0.2% lower on Monday at US$1.1840. At 09:15 UTC, EUR/USD trades +0.3% at US$1.1877, at the high of the day.
German GDP data revealed that the Eurozone’s largest economy expanded at a faster rate than expected in the July – September period. The final Q3 GDP hit 8.5% quarter on quarter, beating the previous print of 8.2% and a solid rebound after Q2’s record contraction of -9.7%.
Adding to the upbeat news, German IFO Business sentiment data beat forecasts at 90.0 in November down slightly from 90.3 in October, but still well ahead of the 87.2 forecast. However, the futures expectation part of the survey was gloomier, falling to 91.5, down from 95. This was a steeper drop than analysts forecasts. The outlook was particularly bad for services as renewed lockdown restrictions put a halt to their recovery.
An upbeat mood in the market continued to support the Euro as investors cheer the vaccine developments from the previous day. News that AstraZrneca’s vaccine candidate is also 90% effective with a certain does or 70% effective with a single dose is lifting risk appetite, dragging on the safe haven US Dollar.
The US Dollar is also trending lower across the board as signs that Trump is ready to move on from the elections helps the risk on mood.
Joe Biden has received official acknowledgment that he effectively won the race to the White House. Trump liked the tweet, sending the message that he has come to terms with the election outcome.
The prospect of a disorderly transfer of power has dragged on the market for the past three weeks since the election; a line can now be drawn under this risk.
Looking ahead US consumer confidence data will be in focus.