- Euro (EUR) slips off highs but remains buoyant after German consumer confidence drops -6.7
- EBC minutes from November meeting in focus
- US Dollar (USD) drops after weak US jobless claims & on vaccine optimism
- US closed for Thanksgiving holiday
The Euro US Dollar (EUR/USD) exchange rate is extending gains for a third consecutive session on Thursday. The pair settled +0.2% in the previous session at US$1.1913 approximately in the middle of the daily traded range. At 09:15 UTC, EUR/USD trades +0.1% at US$1.1923 after falling away from the high of US$1.1941 reached earlier in the session.
A broadly upbeat mood is keeping the Euro buoyant, as vaccine optimism continues to underpin sentiment. However, investors continue to digest the near term deterioration of the economy, which is capping gains in the common currency.
German GFK consumer confidence declined to a worse than expected -6.7, a 5 month low, falling from -3.2 in November Consumer morale has halved as the German economy suffers under the weight of the second national lockdown. Last night Chancellor Angela Merkel announced that a lockdown – lite will be extended until 20th December.
Attention will now turn to the release of the minutes from the latest European Central Bank’s monetary policy meeting. The ECB are broadly expected to ease monetary policy in December, investors will be looking for further confirmation. This could limit any gains in the common currency.
The US Dollar continues to trade on the back foot versus its major peers dragged down by downbeat data, whilst optimism surrounding covid-19 vaccines is promoting investors to ditch the safe haven currency.
Wednesday’s data deluge painted a mixed picture of the US economy. Whilst Q3 GDP came in line with expectations, durable goods beat forecasts. However, concerns grew over the state of the US labour market after initially jobless claims rose again to 778k. This was the second week of rising claims, and the highest level for 5 weeks providing a strong signal that the recovery in the US labour market has stalled and appears to be reversing.
Today the US is closed for Thanksgiving so trading is expected to be muted.