EURO : Outlook Improve

(Sun, 8 Nov 2020). After a week when EUR/USD trading was dominated by the US Elections and the subsequent weakness of the US Dollar, business will likely be less frantic this coming week. By Thursday the safe-haven USD was easier on a move towards potentially riskier assets and, barring speed bumps and profit-taking, that trend could well continue, to the benefit of the Euro.

Note though that EUR/USD remains towards the middle of the 1.1610 to 1.2016 range it has traded in since July 27 and a breakout either higher or lower would be a big surprise.

That said, there are several data points to watch out for in the Eurozone that are potentially market-moving. First up, on Tuesday, is the ZEW index of German economic sentiment in November, which economists expect to fall to 50.8 from 56.1 in October. The index is not hugely reliable but it will indicate the extent to which pessimism has grown as the second wave of coronavirus has hit Europe’s largest economy.

Final German October inflation data and Eurozone September industrial production figures, both due Thursday, are perhaps worth no more than a passing glance. That then leaves the second estimate of Eurozone GDP in the third quarter, due Friday, but those numbers too will have little impact unless there are major changes from the initial estimates of a 12.7% increase quarter/quarter and a 4.3% fall year/year.

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