The euro US dollar exchange rate is advancing following a steep selloff in the previous session, explains Fiona Cincotta of Currency Live.
The pair settled -0.6% lower on Thursday at US$1.1962, a fresh multi-month low. At 09:15 UTC, EUR/USD trades +0.1% at US$1.1980, at the top end of the daily traded range. The pair is on track to lose 1.3% across the week, its second straight week of losses.
The euro has been under significant pressure across recent weeks amid the slow rollout of the vaccine in the region. There are growing concerns that the slow rollout of the vaccine could mean that lockdown will last longer, and that economic weakness could persist into the second quarter of the year.
Offering support to the euro is news that former European Central Bank President Mario Draghi is working to form a government to steady the ship in Italy and attempt to pull the Eurozone’s third-largest economy out of a deep recession.
Datawise, German factory orders disappointed, falling by more than expected in December as Covid lockdowns took its toll. Orders dropped by -1.9% month on month after a 2.7% increase in November. This was worse than the 1% decline that analysts forecast.
The US dollar is slipping mildly lower on Friday after a strong week of gains and ahead of the closely watched US non-farm payrolls.
Expectations are for 50,000 jobs to have been added in the US in January. The economy lost 140,000 jobs in December in the first negative print since April.
The leading indicators are pointing to a strong headline reading from the jobs report. The ADP private payroll print was significantly ahead of expectations, initial jobless claims were lower than forecast and the employment sub-component of the ISM non-manufacturing PMI showed strong gains. A stronger than forecast reading could lift the US dollar.
To learn more about Fiona Cincotta, please visit CurrencyLive.com.
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