- Euro (EUR) snaps a two day losing streak
- ECB minutes & consumer confidence due
- US Dollar (USD) pares some gains after dovish Fed
- US jobless claim in focus
The Euro US Dollar (EUR/USD) exchange rate is rebounding on Thursday after two straight days of losses. The pair settled -0.5% lower on Wednesday at US$1.2040 towards the low of the day. At 09:15 UTC, EUR/USD trades +0.24% at US$1.2066
The Euro moves cautiously higher as the outlook for region remains weak amid a slow covid vaccine rollout out programme. This means that the timetable for reopening the economies within the Eurozone and economic activity returning to a level of normalcy is being pushed back.
The minutes from the latest ECB meeting are due to be released today. The meeting was relatively uneventful given the big moves made by the ECB in December so no surprises are expected.
The preliminary February reading of Eurozone consumer confidence data is due. Analysts expect the data to show a very slight improvement to -15 from -15.5. A print which is significantly different from the forecast could move the Euro. A more confident consumer is likely to spend more boosting the economy, whilst a less confident consumer would be expected to keep their purse strings tied.
US retail sales rose an impressive 5.3% in January smashing analysts forecasts of 1.1% as US consumers spent the $600 stimulus checks.
Whilst US retail sales were very bullish. The US Federal Reserve minutes showed that the Federal Reserve were still dovish in their assessment of the economy. Policy makers said it would likely take some time until the US economy generated sufficient growth for the central bank to consider tightening monetary policy.
The Fed’s persistence to keep the status quo with interest rates at near zero comes as the bond market prices in an acceleration in inflation. The Fed, however, considers that any eventual spike in inflation will be short lived.
Looking ahead US jobless claims data will be in focus. Analysts expect weekly jobless claims to be 765,000, a fall from the week before which printed at 793,000. Even so, claims are still elevated indicating that business are still struggling after the resurgence of covid.