EUR/USD: Uncertainty surrounding COVID-19 limits the upside
The EUR/USD pair finishes the week with gains around 1.1830, at the upper end of its latest range but still unable to define a trend. This week, the US, Germany and the EU will report their respective Q3 Gross Domestic Product figures. It’s all about economic growth, as FXStreet’s Chief Analyst Valeria Bednarik notes.
Key quotes
“With coronavirus outbreaks spreading like wildfires and governments taking tough measures just shy of lockdowns, speculative interest is extremely cautious, and will likely remain so. Vaccines and treatments are still under study and advancing, but there’s no magic solution yet. Even further, there won’t be one in the foreseeable future. And that means more economic contraction or in the best-case scenario, slow growth.”
“Polls indicate that US President Donald Trump’s rival, Joe Biden, leads. Also, at least 50 million Americans have cast their votes in the current election, more than a third of the total votes from 2016. The one thing that’s clear is that whoever wins, a stimulus package is coming, although its extent will define whether the greenback will remain pressured or change the course.”
“The macroeconomic calendar will provide further clues on economic growth in the next week, starting on Monday with the German IFO Survey on Business Climate for October. On Tuesday, the US will publish September Durable Goods Orders, seen falling to -0.1% from 0.5% in August.”
“Thursday will be quite a busy day as the ECB is having a monetary policy meeting. European policymakers, however, are not expected to change the current policy. At the same time, the US will publish the first estimate of its Q3 Gross Domestic Product. The GDP is expected to increase by around 30%, a record economic growth, although coming from a record bottom of -31.4% in the second quarter of the year.”
“On Friday, it will be the turn of Germany and the EU will report their respective Q3 GDP. German’s figure is expected at -8.9 quarterly basis, while the EU one is foreseen at -14.1%.”