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EUR/USD Slips To New Lows On Good U.S. Data

By Kathy LienForexMar 25, 2021 04:39PM ET
www.investing.com/analysis/eurusd-slips-to-new-lows-on-good-us-data-200569573
EUR/USD Slips To New Lows On Good U.S. Data
By Kathy Lien   |  Mar 25, 2021 04:39PM ET
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Stronger than expected economic reports drove the U.S. dollar higher against all of the major currencies. There’s no question that of the G3 currencies (USD, EUR and JPY), the U.S. is leading the recovery, and data is beginning to show the benefits of a smooth coronavirus vaccine rollout. Seventy percent of Americans 65 or older have received at least one COVID-19 vaccine dose, with more than a third of the overall adult population receiving their first jab. Businesses are reopening and economic activity is accelerating. As a result, jobless claims fell to 684,000, its lowest level in more than a year. Fourth quarter GDP growth was also revised up to 4.3% from 4.1%. The U.S. economy is still a long way from normal, but the numbers show that it is moving in the right direction. With more Americans getting vaccinated every day, further improvements are likely. Personal income and spending numbers are due for release tomorrow.
 
While investors bought U.S. dollars, stocks did not turn higher until after the London close. The reluctance can be partly attributed to Federal Reserve Chairman Jerome Powell’s comments on NPR’s Morning Edition. For the first time since the pandemic began, he talked about a future with less stimulus. Powell said: “As we make substantial further progress toward our goals, we’ll gradually roll back the amount of Treasuries and mortgage-backed securities we’ve bought.” However, all of this would be predicated on a strong recovery, which is ultimately positive for U.S. assets and explains why equities recovered their losses to end the day up.
 
Fewer restrictions and more vaccinations stand in stark contrast with Europe, where fresh lockdown measures were announced this month for Germany, France and Italy. Compared to the U.S., only 9% of the German population have received their first shot. We have been bearish euros all month, and that will remain true regardless of tomorrow’s IFO report. German business confidence may be bolstered by the stronger PMIs, but confidence in the region will be restrained until the government gets better control of the latest wave. ECB member Luis De Guindos sees Eurozone GDP contracting in the first half of the year. EUR/USD dropped below 1.18 for the first time since November and it may not find support until the 50-week SMA at 1.17. 
 
Sterling, on the other hand, snapped a five-day decline to end the day higher against the U.S. dollar. The UK is in a very difficult position with COVID-19. Like the U.S., its vaccine rollout program has been quick and aggressive. More than 50% of its adult population received their first shot, and this will pay dividends for the economy. Retail sales are due for release on Friday, and we are looking for a solid increase after last month’s sharp decline. 
 
The Australian and New Zealand dollars erased earlier gains to end the day lower against the greenback, whereas the Canadian dollar started the day under pressure. Although New Zealand’s trade balance returned to surplus, investors cannot look past the government’s recent steps to curb housing price increases. No data was released from Canada, but oil prices resumed their slide and, more importantly, Canada’s Supreme Court ruled the carbon tax law is constitutional. Reducing greenhouse gas emissions is a top priority for the government and this tax, which is bad for the industry, is something it would have had to deal with eventually. 
EUR/USD Slips To New Lows On Good U.S. Data
 

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EUR/USD Slips To New Lows On Good U.S. Data

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Comments (13)
Hemat Ranjbar
Hemat Ranjbar Mar 26, 2021 1:14AM ET
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Leading comments. thanks.🙏
Rayfield Allen Jones
Rayfield Allen Jones Mar 25, 2021 10:37PM ET
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too good to be true, they just cover their asses with positive news
Ravi Kiran
Ravi Kiran Mar 25, 2021 10:06PM ET
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US is just printing too much dollor. This will ******up in their face.
Mohammad ali Karimi
Mohammad ali Karimi Mar 25, 2021 9:42PM ET
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ure the one🥰
Inya Daniel
Inya Daniel Mar 25, 2021 7:53PM ET
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thanks so much God will bless you long life
Tobechukwu Olumba
Tobechukwu Olumba Mar 25, 2021 6:52PM ET
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Thank you
Raphael Emmanuel
Raphael Emmanuel Mar 25, 2021 6:26PM ET
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I love your analysis because you are simple with your words and vocab
Mohammed Aputeog
Mohammed Aputeog Mar 25, 2021 6:16PM ET
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Thanks for the analysis
Marjeta Derstila
Marjeta Derstila Mar 25, 2021 6:03PM ET
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i don't understand good Englishbye or sell?
Nwoke Onyedikachi
Nwoke Onyedikachi Mar 25, 2021 5:40PM ET
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can I buy now?
Mohamad Bnhasoi
Mohamad Bnhasoi Mar 25, 2021 5:39PM ET
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mohamad
Ivan Ivanov
Ivan Ivanov Mar 25, 2021 5:34PM ET
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Thank you, Kathy! You're the best as always
Christopher Viado
Christopher Viado Mar 25, 2021 5:32PM ET
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E/U is gonna slap that 1.170000 area 1.16700
 
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