EUR/USD Exchange Rate Falls as US Services Sector Continues to Expand
The Euro US Dollar (EUR/USD) exchange rate fell by -0.1% today as fluctuating risk-sentiment has continue to drive demand for the safe-haven ‘Greenback’. The pairing is currently fluctuating around $1.19.
The US Dollar (USD) has also benefited from an improving outlook for the US economy, which is the largest economy in the world.
Today saw the release of the latest US ADP Employment Change figure for April, which rose from 565 thousand to 742 thousand.
The latest US ISM Services PMI for April also continue to post a strong improvement, despite showing some signs of slowing in April following a record high.
Rubeela Farooqi, chief U.S. economist at High Frequency Economics, commented on the data:
‘Expansion in services was ongoing in April even as supply chain disruptions were a headwind. The outlook for the services sector remains positive, aided by a broader resumption of activity.’
As a result, signs that the American economy is recovering from the Covid-19 situation has buoyed the USD/EUR exchange rate.
Euro (EUR) Exchange Rate Falls Despite Robust Eurozone PMI Data
The Euro (EUR) struggled against the US Dollar today despite a robust Eurozone PMI composite figure for April.
Thate latest figure beat forecasts and rose to 53.8, boost confidence in the Eurozone’s economy as key countries begin to ease lockdown measures.
Chris Williamson, Chief Business Economist at IHS Markit, was optimistic about the data, saying:
‘April’s survey data provide encouraging evidence that the eurozone will pull out of its double-dip recession in the second quarter. A manufacturing boom, fuelled by surging demand both in domestic and export markets as many economies emerge from lockdowns, is being accompanied by signs that the service sector has now also returned to growth.’
Nevertheless, EUR traders are remaining cautious as the EU has suffered from several spikes of Covid-19 this year, which could impede the Eurozone economy growth in the first quarter of 2021.
EUR/USD Exchange Rate Forecast: Could Rising German Factory Orders Boost the Single Currency?
Euro (EUR) investors will be eyeing tomorrow’s release of Germany’s Factory Orders figure for March.
If this shows any signs of improvement, then the Euro would head higher as hopes for the Germany economy – the Eurozone’s powerhouse economy – would uplift demand for the single currency.
Tomorrow will also see the release of the latest Eurozone Retail Sales data for March. As the figure is largely forecast to improve, we could see the EUR/USD exchange rate begin to head higher.
US Dollar (USD) investors will be eyeing tomorrow’s release of the latest US jobless data for April. Any improvement in the US labour market would be USD-positive.
Tomorrow will also see the release of the flash US Nonfarm Productivity report for the first quarter. If this shows a rosy outlook for the world’s largest economy, then the EUR/USD exchange rate could continue to fall.