- Euro (EUR) rises despite dovish comments from Christine Lagarde
- Slow vaccine rollout in EU could cap gains
- US Dollar (USD) trades around 2 week low
- US initial jobless claims in focus
The Euro US Dollar (EUR/USD) exchange rate is advancing on Thursday after a flat finish in the previous session. The pair settled just 3 pips lower on Wednesday at US$1.2116 in the middle of the daily traded range. At 09:15 UTC, EUR/USD trades +0.1% at US$1.2129 the high of the day.
The Euro is advancing cautiously, although the recent rally in the common currency appears to be running out of steam. Yesterday the European Central Bank President Christine Lagarde said that it was unlikely that inflation would move towards the ECB target of 2% in the medium term. This comment was indirectly hinting towards prolonged monetary easing, so could cap gains in the Euro.
The Eurozone’s slow vaccine delivery could also prevent the Euro from running much higher. The EU has been slow to rollout the covid vaccine prompting concerns that the economic recovery could be slower than initially feared.
The US Dollar continued to hover around 2 week lows in early European traded dragged down by dovish comments from Federal Reserve Chair Jerome Powell.
Speaking to the Economic Club of New York on Wednesday evening, Fed Chair Powell said that the US jobs market was far from fully recovered. He added that he Fed isn’t considering raising interest rates from their current near zero level as he called for a patient stimulus approach to keep the economic recovery alive.
His comments come after US inflation missed forecasts holding steady in January at 0.3% month on month missing expectations of 0.4%. However core inflation which removes the impact of volatile items such as food and fuel gained 0.2% month on month missing forecasts of 0.3%.
Data wise the weekly US jobless claims numbers will be in focus. Initial jobless claims are expected to slip slightly to 757,000. This would be down from last week’s 779,000.