- Euro Group Meeting
- Euro Longest Rally
- FED Economy Warning
EUR/USD was flat during the European session on Thursday after consolidating at three-month highs ahead of a crucial Euro group meeting. The pair struggled for direction on a lack of new catalysts. Traders await the outcome of the meeting that comes just days after the European Central bank approved a massive €1.35 t trillion stimulus plan.
The Euro is currently on its longest rally against the dollar. It is hot on the heels of the French and Germany Governments agreeing on a European Union rescue fund to revitalize the region’s economy. The EUR/USD pair has also continued to edge higher on the FED warning that the U.S economy is poised to contract by 6.5% in 2020. The warning has gone to fuel weakness in the greenback, fueling the upward momentum on the EUR/USD pair.
Euro Strength Catalysts
Euro has strengthened by more than 4.5% against the dollar since the start of the month, due to a number of factors. For starters, the single currency has benefited a great deal from the greenback’s weakness, as the global economy continues to recover from COVID-19. Signs of political unity within the Eurozone in the race to revitalize the blocks economy, post-COVID-19, has also helped fuel some strength on the Euro.
Euro strength has also come at the backdrop of the European Central Bank approving an additional €600 billion as part of the Pandemic Emergency Purchase Program for cautioning the battered Eurozone economy.
However, the single currency appears to have hit strong resistance at three-month highs as concerns about the Eurozone economy outlook continues to rattle the markets. Weak economic data at the back of a massive stimulus plan continues to weigh down EUR strength against the dollar.
Looking ahead, the focus will be on U.S Initial Jobless claims as PPI MOM data expected to influence greenback strength conversely EUR/USD direction of trade.