- US Dollar Index rises for third straight day on Wednesday.
- Uncertainty surrounding EU’s coronavirus recovery plan weighs on euro.
- Consumer Confidence Index in euro area fell more than expected in April.
The unabated selling pressure surrounding the shared currency on Wednesday weighed on the EUR/USD pair and dragged it to its lowest level in two weeks at 1.0803. As of writing, the pair was down 0.37% on a daily basis at 1.0815.
Eyes on EU’s coronavirus recovery plan
On Thursday, the EU leaders will meet to try to come up with a plan to help economies recover from the coronavirus outbreak. However, citing a blog official earlier in the day, Reuters reported that EU countries were unlikely to come up with a plan until late summer amid major disagreements. “My hope is to make progress in June, July,” the EU official told Reuters. “Political lines are moving but it will take time.”
Meanwhile, the preliminary data published by the European Commission revealed that the Consumer Confidence Index in the euro area dropped to its lowest level since 2009 at -22.7 in April to further weigh on the euro.
On the other hand, the US Dollar Index, which dropped to the 100 area earlier in the day, recovered to 100.40 during the American trading hours to keep the bearish pressure intact.
On Thursday, the IHS Markit will release the April Manufacturing and Services PMI data for Germany and the eurozone. Previewing the data, “in the scenario that over-pessimism is the case this time as well, EUR/USD has room to rise if the data beats expectations,” said NDDFX analyst Yohay Elam. “Downbeat estimates do not prevent actual statistics to fall even lower as Italy’s sub-20 figures have proved. In that case, EUR/USD may edge lower.”
Technical levels to watch for