- Euro (EUR) gains traction paring losses from previous session
- EZ unemployment & GDP data, German ZEW economic sentiment in focus
- US Dollar (USD) edges higher versus major peers
- US fiscal stimulus negotiations to continue
The Euro US Dollar (EUR/USD) exchange rate is pushing higher on Tuesday paring mild losses from the previous session. The pair settled -0.1% lower on Monday at US$1.2108, after recovering from the session low of US$1.2078 earlier in the session. At 09:15 UTC, EUR/USD trades +0.13% at US$1.2124.
After a softer start the Euro is edging higher ahead of several data points from the bloc. Attention will be on Eurozone Q3 GDP, third estimate, unemployment figures and German ZEW economic sentiment data.
The Euro has been well supported as it continues to trade around 32 month highs on the back of a weaker US Dollar and optimism surrounding the economic recovery in the region.
Data on Monday revealed that investor sentiment in the bloc rose by more than expected in December, hitting its highest level since February. Optimism surrounding the covid vaccines and hopes that it will boost the economy over the coming months helped lift sentiment.
German industrial production also posted a solid gain of 3.2% in October, a sharp increase from 1.6% in September. Recent data from Germany has highlighted the resilience of the sector despite a rising covid cases and tightening lockdown measures.
The US Dollar is weaker versus the Euro but is edging higher versus its major peer. The US Dollar Index trades +0.03% at the time of writing as investors seek out its safe haven properties in risk off trade.
The US Congress is expected to vote this week on a stopgap funding measure. This will then allow lawmakers more time to negotiate an emergency covid rescue package.
The need for an additional fiscal stimulus plan has been more than evident over recent days after the US non-farm payroll data disappointed and as states start to tighten lockdown restrictions as covid cases spike in the US after the Thanksgiving holiday.