The Euro came under further pressure in yesterday’s trading session after an economic speech from US Federal Reserve President who raised concerns about the new variant of Covid 19 which in his view poses a threat to economic growth.
Fed boos Jerome Powell noted that the Omicron virus may put the recovery of the US employment market in jeopardy and also distort the inflation figures which are already sitting at a 30 year high.
“The recent rise in COVID-19 cases and the emergence of the Omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation,” Mr Powell said.
“Greater concerns about the virus could reduce people’s willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions.” He added.
The Euro was probably saved from further losses after the release of the latest monthly consumer price index figures from Germany which hit the market at -0.2 percent against analysts’ expectations for a figure of -0.5 percent while the yearly numbers also beat consensus coming in at 5% against consensus for a figure of 5.2%.
As we enter today’s European session the Euro has received a boost by news from some of the drug companies such as Moderna who developed the current coronavirus vaccines. The company noted that it was not to concerned about the new strain of the Omicron Covid variant and claim to have vaccines in place should there be a major breakout.
Looking further ahead today, the main drivers of the EUR/USD currency pair will be the release of the latest unemployment rate from Germany and consumer price index figures from the Eurozone.
In the American session will see consumer confidence figures from the US as well the second part of Fed president Jerome Powell’s speech to the Senate Banking Committee.
As we can see on the chart, the EUR/USD currency pair found support in yesterday’s trading session at the $1.1292 mark, and this has continued in today’s session with buyers pushing the price to the $1.1349 level.
Any further news about the spread of the Omicron virus is likely to dictate whether the Euro can move higher from this point and especially if the virus has spread to the European continent.
The speech to the Senate Banking Committee by Fed chair Powell will also play a big part in the Euro’s fortunes as the trading day comes to an end.