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Economic Data Puts the EUR in Focus, with Geopolitics and COVID-19 to also Influence

Bob Mason

Earlier in the Day:

It was a particularly quiet day on the economic calendar this morning. There were no material stats out through the Asian session to provide any direction.

A lack of stats left the markets in the hands of chatter from the weekend and the latest COVID-19 news and numbers.

At the end of last week, news had hit the wires of China’s security law heading for Hong Kong, leading to some caution through the Asian markets.

Strong words from both the U.S and China as tensions have built tested market risk appetite early on.

While the rise in tension is certainly a concern, positive updates from COVID-19 vaccine trials provided support to riskier assets early on. The positive news was coupled with a continued downward trend in new coronavirus cases across the EU and the U.S.

Looking at the latest coronavirus numbers,

On Sunday, the number of new coronavirus cases rose by 100,455 to 5,497,427. On Saturday, the number of new cases had risen by 99,013. The daily increase was higher than both Saturday’s rise and 83,321 new cases from the previous Sunday.

France, Germany, Italy, and Spain reported 1,470 new cases on Sunday, which was down from 1,658 new cases on Wednesday. On the previous Sunday, 2,500 new cases had been reported.

From the U.S, the total number of cases rose by 20,190 to 1,686,436 on Sunday. On Saturday, the total number of cases had risen by 21,152. On Sunday 17th May, a total of 19,891 new cases had been reported.

The Majors

At the time of writing, the Japanese Yen was down by 0.01% to ¥107.65 against the U.S Dollar, with the Aussie Dollar down by 0.08% to $0.6532. The Kiwi Dollar was up by 0.01% to $0.6095.

The Day Ahead:

For the EUR

It’s a relatively busy day ahead on the economic calendar. Germany is back in focus, with 2nd estimate GDP numbers and May’s IFO Business Climate Index figures due out.

Barring a marked downward revision to the GDP numbers, the IFO figures will likely have the greatest influence.

As lockdown measures ease through May, the markets will be looking for a pickup in both business and consumer confidence.

Away from the economic calendar, expect the news wires to also influence. China and the U.S will be in focus as will any chatter from Brussels and EU member states on the COVID-19 recovery fund.

At the time of writing, the EUR was down by 0.02% to $1.0899.

For the Pound

It’s a quiet day ahead on the economic calendar. There are no material stats due out of the UK to provide the Pound with direction, with the UK markets closed.

A lack of stats leaves the Pound in the hands of Brexit and COVID-19 updates, both of which remain Pound negative.

While an easing in lockdown measures is positive, the continued spread of the virus across the UK has led to a delay of a more widespread opening of the economy.

With the UK’s neighbors taking more aggressive steps to ease lockdown measures, the UK economic recovery will likely trail behind those of the EU and the U.S.

At the time of writing, the Pound was up by 0.10% to $1.2185.

Across the Pond

It’s also a quiet day ahead on the U.S economic calendar, with no material stats due out to provide the Dollar with direction. The U.S markets are closed, which will leave volumes on the lighter side.

A lack of stats will leave the Dollar in the hands of any chatter from Beijing and the Oval Office and COVID-19 news…

The Dollar Spot Index was down by 0.08% to 99.787 at the time of writing.

For the Loonie

It’s a quiet day on the economic calendar. There are no material stats due out of Canada to provide the Loonie with direction.

Expect risk sentiment to provide direction on the day. While the tension between the U.S and China was negative, progress towards a COVID-19 vaccine was positive early on.

At the time of writing, the Loonie was up by 0.01% to C$1.3997 against the U.S Dollar.

This article was originally posted on FX Empire