- Euro (EUR) holds firm after German industrial production jumps 3.2% MoM
- ECB & EU Summit in focus later in the week
- US Dollar (USD) rises versus major peers in risk off trade
- US – China geopolitical tension rise
The Euro US Dollar (EUR/USD) exchange rate is holding steady at the start of the week after a strong rally across the previous week. The pair surged 1.3% across the previous week, closing on Friday at US$1.2120 50 points off the high of the week and the highest level for 32 weeks. At 07:15 UTC, EUR/USD trades flat at US$1.2120.
German industrial production surged across October thanks to booming car sales, adding to evidence that he manufacturing sector is helping the Eurozone’s largest economy to set off to a solid start in the final quarter of the year.
Industrial production increased by 3.2% month on month in October following an upwardly revised increase of 2.3% in September, marking the largest increase since June and smashing expectations of 1.6%. Even so this is still down from the 5% increase seen in February, before the pandemic hit.
Germany’s automobile industry, its largest industrial sector saw production soar by 10% in October compared to the previous month. However, this was still below pre-pandemic levels.
This week is set to be a big week for the Euro as investors look ahead to the European Central Bank meeting and the EU Summit both on Thursday.
The US Dollar is trading broadly higher versus its major peers as investors seek out its safe haven properties in risk off trading.
Rising geopolitical tensions between the US and China is overshadowing vaccine optimism as the Pfizer vaccine begins to be rolled out across the UK.
Even though he is soon leaving the White House, Trump showed that he is still keen to pile the pressure on China’s Xi Jinping in the weeks before he leaves. Reports that the Trump administration is preparing to sanction a dozen or so Chinese officials is hitting risk sentiment.