- EUR/USD Dips Back on Poor German Data
- US Also Expecting Large GDP Drop
- Markets Under Pressure Amid Busy Earnings Period
The Euro has dropped back slightly but shown some resilience today as it trades around the 1.175 mark against the US Dollar following the release of underwhelming German GDP data. This has been matched by a slight improvement in the US Dollar though this is sure to be tested later today with the release of American GDP data. Markets around the world in general are battling against poor earnings reports and a continuing increase in COVID-19 case numbers.
EUR/USD Resists Fall as German GDP Reports Large Drop
The Euro retreated for a short period on the release of German GDP data today. The biggest economic power in Europe reported a quarterly drop of 10.1% which was below what was forecast, while reporting a similarly below expected drop of 11.7% annually.
The currency quickly bounced back though as forex traders considered the numbers and appeared to take light from the fact that unemployment numbers in Germany have reportedly dropped as opposed to the increase that was expected. The hope is that these figures are reflective of the worst period in Europe for coronavirus, and that everything from here on out will be more positive as the bloc continues to recover. Those forex trading the pair will be poised to see how the US GDP release scheduled later today impacts the market.
Eyes on US Data as Huge GDP Contraction Expected
Given that the numbers released today are reflective of perhaps the most difficult global period during the COVID-19 pandemic, there is no surprise that analysts are forecasting a massive drop in American GDP figures. Many expect this number to be beyond a 34% drop. This figure, although many markets may have already priced it in, could still have a negative impact on an already much weakened US Dollar, and economy overall.
Forex brokers will be hopeful that traders can take some positive from the proposed second round US stimulus package which is looking to boost the economy by a further $1 trillion. This, combined with the Federal Reserve’s decision to hold the interest rate steady on Wednesday it is hoped will stabilize the economy as it deals with a torrid earnings season amid continually increasing case numbers. They repeated their support with Fed chief Powell commenting that the fed remain committed to using their full range of tools to support the economy.
Markets Set to Open Lower as Earnings Reports Continue
The Dow Jones futures trading was down more than 200 points today, along with both the NASDAQ & S&P500 trading low before the opening bell as another tough day of earnings reports are expected. Facebook, Amazon, Google, and Apple, are all set to report on Thursday.
Traders will be hoping that positive numbers from these major four companies can sustain the market as many others are set to report largely negative numbers throughout the day.