Daily Currency Update

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The Greenback falls after the Euro reaches an almost 3-month high following ECB monetary policy actions.

USD - United States Dollar

The U.S. dollar continues to fall and the EUR/USD pair finds some resistance on the upside at around 1.1350. On the economic front for the week ending May 30th, the advance figure for seasonally adjusted initial employment claims was 1,877,000, which is a decrease of 249,000 from the previous week's revised level. At the same time, according to the Bureau of Economic Analysis, there was a decline in exports and imports that continued in April due to the impact of Covid-19, as many businesses were operating at limited capacity or ceased operations completely, and the movement of travelers across borders was restricted. It also noted that the full economic effects of the pandemic cannot be quantified in the trade statistics for April.

According to Bloomberg, while the April employment report reflected really bad results in terms of the number of job losses, the May release could show the impact spreading across a broader spectrum of industries and roles. Bloomberg economics forecasts that tomorrow Nonfarm Payrolls will have net hiring decline of 7.0 million in May.

Key Movers

The Euro gained against most of its Group-of-10 peers and increased 0.90 percent versus the Greenback. It is trading at a 1.1362, an almost 3-month high (from March 11th 2020) versus the U.S. dollar and a one-year high versus the Japanese Yen, following the European Central Bank’s announcement of a bigger-than-anticipated increase to its emergency bond-buying program. The ECB by broad consensus, voted to expand its PEPP by an additional 600 billion Euro to a total of 1,350 billion Euro and to extend the program until at least mid-2021. The EUR/USD pair kept climbing after Lagarde’s press conference.

The Loonie falls versus all the G10 majors following a strengthening of the Euro. Even the USD/CAD pair trades 0.10 percent higher at 1.3510 (weaker Loonie), despite the Greenback debacle, which shows the huge dependence of the Canadian economy on the United States.
On the economic front, according to Statistics Canada, “...production shutdowns, falling energy product prices, the closure of many retail stores, and weaker demand due to physical distancing measures related to the Covid-19 pandemic resulted in drastic decreases in Canada's exports and imports in April.”

U.S. futures and European stocks extended losses on Thursday, even as the ECB added to an already massive stimulus package and American jobless claims fell from the previous week.

Expected Ranges

USD/CAD: 1.3500 - 1.3605 ▲

EUR/USD: 1.1200 - 1.1369 ▼

GBP/USD: 1.2516 - 1.2626 ▼

AUD/USD: 0.6875 - 0.6945 ▼

NZD/USD: 0.6384 - 0.6475 ▼