The Euro is extending losses versus the US Dollar on Tuesday in risk off trading. The Euro US Dollar exchange rate closed the previous session 0.05% lower at US$1.0863.
At 08:15 UTC, EUR/USD is trading -0.3% lower at US$1.0838 as investors digest historic falls in the oil market, the failing health of North Korea’s leader and look ahead to Euro ZEW sentiment data.
Slight Improvement In Sentiment Forecast But Still Terrible
The euro is trading on the back foot ahead of the release of the ZEW sentiment survey. This data reflects business sentiment in both Germany and the Eurozone. Analysts are expecting the index to print at -42.3 in April, a slight improvement from March’s -49.5 but still at historic and unprecedented levels as the coronavirus pandemic brings business activity to a standstill. The crisis is far from over, however countries in the eurozone, including Germany are trying to find a way out of the lock down, this is lifting sentiment slightly.
Safe Have Dollar Jumps As Oil Goes Negative
The US Dollar is pushing higher in a broadly risk off session. Reports that North Korea’s leader Kim Jong Un is in a critical condition in hospital following heart surgery is weighing on sentiment. These raises concerns over succession in the nuclear rogue country.
Adding to the risk off tone is the historic fall in oil prices. West Texas Intermediate for May delivery plunged into negative territory for the first time ever, amid a huge glut and a lack of storage for oil. This basically means that sellers are paying for oil to be taken. The plunge in oil prices could see a lot of companies get hit and may start to fail. As a result, the US Dollar’s safe haven status is making it attractive in early trade.
Looking ahead investors will look ahead to the release of US new home sales. With buyers and sellers remaining apart die to social distancing, physical house viewings have ground to a halt. As a result, US home sales data is expected to have slumped -8.1% in March. Weak data could unnerve investors.
