- Eurozone Stimulus Concerns
- EU Heads Meeting
- U.S Labor Market Concerns
EUR/USD pair bounced back slightly, on Friday morning, as a slide from three months cooled off on U.S dollar weakness. The pair has come under pressure in recent weeks after hitting a strong resistance level on struggling to find support above the $1.14 level.
The EUR/USD rallied Friday morning as the Dollar edged lower against the basket of other major currencies. The dollar index was down by as much 0.1% after surging in recent days on concerns about the second wave of Coronavirus infections.
EUR/USD pair is down by more than 0.4% for the week. The slide has coincided with weakness in the EUR as traders question the political viability of the European Union’s stimulus Plan. German highest court has already questioned the European Central Bank over its proposed plan to go forth with the purchase of government bonds.
The Eurozone heads are poised to hold a video conference on Friday to discuss the EU commission’s plans to borrow €750 billion to try and revitalize the economy, struggling with one of the biggest downturns in recent history.
The EUR has also remained on edge as traders await a report from the ECB outlining the impact of the latest long term lending program. Concerns over the effectiveness of the negative interest rates continue to weaken confidence about the ECB’s ability to support the Eurozone economy through monetary policy.
However, U.S dollar weakness continues to offset EUR weakness. Unemployment levels have already ticked higher with more than 1.5 million Americans filing for unemployment benefits the past week. Challenges in the labor market continue to arouse concerns about the U.S economy.
According to the Labor Department, even with the openings, amidst the second wave of coronavirus infections, the number of new applications for unemployment benefits fell by 58,000.
A plethora of weak economic data in the U.S and Europe has kept the EUR/USD rangebound after a recent sell-off from three-month highs.