- Euro (EUR) stabilizes, German GDP beats forecasts
- ECB meeting minutes to be released
- US Dollar (USD) trades flat ahead of Biden stimulus announcement
- Fed Powell & jobless claims in focus
The Euro US Dollar (EUR/USD) exchange rate is treading water on Thursday after a steep selloff in the previous session. The pair settled -0.4% in the previous session at US$1.2157, just 15 pips above the session low. At 09:15 UTC, EUR/USD trades steady at US$1.2157.
Germany reported another grim covid record, with the death toll reaching a record high. The end to lockdown in the Eurozone’s largest economy remains well out of sight.
The Germany economy shrank by a smaller than expected 5% in 2020, as strong state support helped limit the economic impact caused by the covid pandemic. This was smaller than the -5.7% contraction that Germany had experienced in the 2009 global financial crisis. Analysts had been expecting -5.1% contraction.
Looking ahead investors will turn their attention to the release of the minutes from the latest ECB meeting.
The US Dollar is holding steady on Thursday after a strong push higher in the previous session. The US Dollar has picked up from multi-year lows struck last week, lifted by rising bond yields as traders expect substantial additional stimulus from the Joe Biden administration.
Joe Biden is expected to announce $2 trillion stimulus package later today, a large top up from the $900 billion relief package approved by Congress. This move is boosting expectations of a stronger economic recovery this year and the possibility that the Fed could start tapering its bond buying programme earlier than initially anticipated.
Federal Reserve Chair Jerome Powell is also due to speak later today and could provide fresh direction for the US Dollar. Investors will be listening carefully for any guidance over the possibility of tapering the bond purchases.
US jobless claims will also be in focus and are set to stabilize below 800,000 as the US economy continues to struggle with covid.