- Euro (EUR) set to gain 1.2% across the week
- German IFO sentiment data in focus
- US Dollar (USD) picks up from multi year lows
- US jobless claims unexpectedly hit 3 month high
The Euro US Dollar (EUR/USD) exchange rate is edging lower snapping a 4 day winning streak . The pair settled +0.6% higher on Thursday at US$1.2266 after hitting a high of US$1.2273 a level last seen in early 2018. At 09:15 UTC, EUR/USD trades -0.1% at US$1.2251. The pair is set for weekly gains of 1.2% after booking mild losses in the previous session.
The Euro has been well supported across the week thanks to the softer tone surrounding the US Dollar and vaccine optimism. On Thursday the EU confirmed that it would be expediting approval for the covid vaccine. The Pfzier and BioNTech vaccine is now expected to be approved in EuroPe before Christmas.
Attention will now turn to the German IFO sentiment survey. Whilst analysts expect a deterioration in the assessment of the current climate, the forward looking indicator is expected to tick higher thanks to the vaccine improving the outlook.
The US Dollar has had a tough week. The upbeat mood in the market across the week on vaccine hopes and optimism surrounding US fiscal stimulus has hit demand for the safe haven US Dollar.
Weak jobless claims in the previous session highlighted the desperate need for the Republicans and the Democrats to agree a rescue package for the covid battered economy. US jobless claims unexpectedly jumped to the highest level in 3 months as businesses falter amid surging covid cases. Initial jobless claims rose to 885,000 versus 853,000 in the previous week.
Looking ahead the US economic calendar is light so sentiment is expected to continue driving the greenback.