- Dollar Strengthen On China-U.S Tension
- German-France Pandemic Stimulus Package
- ECB Policy Measures Under Scrutiny
The EUR/USD pair was yet again on the back foot in early Wednesday trading session after powering high in Tuesday trading session, on dollar weakness. The U.S Dollar has come under immense pressure in recent trading sessions amidst reports a coronavirus vaccine is on its way.
Averting further weakness in the U.S Dollar is escalating tensions between the U.S and China over Hong Kong. Traders are increasingly taking up the U.S dollar as a safe haven amidst growing concern of a full-blown standoff between the U.S and China.
EUR/USD pair was down by 0.18% in early Wednesday trading session amidst a strengthened dollar across the board. The greenback was up 0.26% to 99.168, conversely sending the EUR/USD pair to session lows.
Trader’s sentiments also appear to have taken a hit in the wake of German’s constitutional court ruling against the European Central Bank’s bond-buying program. While the ECB has refuted concerns that the ruling will affect its plans to revitalize the EU economy, traders are not taking lightly, the infighting.
So far, there have been concerns that the ECB has done little to cushion the EU economy in the wake of the coronavirus pandemic. The last thing that the ECB needs is infighting between carnal banks in the trading block.
Weak economic data is another headwind that continues to take a toll on the EUR sentiments, conversely pushing the EUR/USD pair lower. German GDP data indicating that the economy shrunk by 2.2% in the first quarter continues to raise serious concerns about the German economy.
However, reports that France and Germany are closing in on a $545 billion pandemic response has helped offer support to the single currency conversely fueling the recent Bull Run. The stimulus package will go a long way in supporting the two economies, battered by the COVID-19 pandemic.