- Euro (EUR) under pressure as market mood deteriorates
- Slow vaccine rollout pressurizes common currency
- US Dollar (USD) rises but on track for weekly losses
- US consumer confidence data in focus
The Euro US Dollar (EUR/USD) exchange rate is slipping lower on Friday after a strong week of gains. The pair settled 0.1% higher on Thursday at US$1.2128 the high of the day. At 09:15 UTC, EUR/USD trades -0.2% at US$1.21. The pair is on track to gain 0.5% across the week after losing ground over the past two weeks.
Most of the Euro’s gains this week have been down to US Dollar weakness rather than an improving outlook in the Eurozone. In fact earlier in the week European Central Bank President Christine Lagarde hinted that inflation was expected to remain lackluster and monetary policy accommadative for the foreseeable future.
Furthermore, with a slow covid vaccine rollout and Germany announcing the extension of the national lockdown until March, economic weakness could easily extend into Q2.
The US Dollar is edging higher in early trade but is still on track for its first weekly loss in three as doubts grow over the strength of the US economy.
US jobless claims data revealed that the number of Americans who signed up for unemployment benefit rose by a higher than expected 793,000 last week. Analysts had been penciling in a rise of 757,000. Furthermore, the slight decrease from the week before was revised sharply higher, painting a pretty grim picture of the health of the US labour market.
The data comes after Federal Reserve Chair Jerome Powell said earlier in the week that the US labour market remains a long way from where it needs to be. The Central banker also committed to keeping interest rates low for longer to support the economy.
Looking ahead US consumer data will be in focus later today. The preliminary figures for February are expected to show a slight increase in morale.