EUR/USD Forex Market Slips on Poor US Data

• Negative Sales Data Puts Further Pressure on Economy
• Markets Open Lower in Line with News
• Oil Prices Continue to Fall Despite Output Agreement

The EUR/USD forex market has continued its recent struggle slipping below the 1.09 threshold in early trading on Wednesday. This post-holiday pattern is an indication that traders are retreating back to the relative safety of the US Dollar. The move back to the Dollar has come as the economy continues to suffer from poor data and a pessimistic outlook in the face of the ongoing coronavirus pandemic. This has shown little sign of let up as many states, and countries around the world still toil under lockdown.

Disappointing Data a Key Driver Behind Further Market Slump

One of the key factors that has influenced the weakening of the EUR/USD forex market has been the very disappointing retail sales data released. This alongside a host of other worse than expected data numbers have sent the market fleeing to the safety of the Greenback.

The retail sales number was the starkest of those released. It took a large dive, falling 8.7%. Not only is this worse than the 8% drop that analysts had predicted, but it is the largest single month decline since the tracking of these numbers began in 1992. Both the Homebuilder Confidence Index, and the Empire State Manufacturing Index in New York fell sharply too. The latter of these number almost doubling its previous record fall. Traders are viewing these numbers and fearing the general consensus that a long lasting, and deep recession may be on the horizon.

Markets React to News with a Sharp Decline at Opening Bell

The Dow Jones shed more than 500 points to open 2.2% lower on Wednesday with the bleak mood over coronavirus extending further based on the dismal data release. Other major markets also tumbled by similar numbers. Both the NASDAQ, and S&P 500 were trading lower by around 2% at the time of writing.

Several key economic players have also reported disappointing earnings figures that have impacted their own stock prices and reverberated around the market. Goldman Sachs was one of the biggest losers. They reported a 46% fall in Q1 earnings as their shares slipped more than 3.5%. Bank of America, and Citigroup also posted very similar numbers. Earnings here tumbled 45%, and 46% respectively, and with similar impact on their market prices.

Deal Does Little to Prevent Further Oil Price Plummet

It had been hoped that the OPEC+ deal struck just prior to the Easter holiday that agreed to cut output by as much as 10% could go some way to repairing the hemorrhaging oil price. The market though remains unconvinced that the agreement which ended a price war between Russia and Saudi Arabia will be enough. The fear is that even this will not counter the demand drop, which has fallen off a cliff during the coronavirus. This has been reflected in the market, with Brent Crude trading below $30, and WTI Crude below $20 a barrel.
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