EUR/USD advances on US recession fears

The Philadelphia Fed said that the last week saw an increase in first jobless claims in the US as manufacturing output fell. Although rates need to be higher, Cleveland’s Fed Loretta Mester is pleased with the progress on inflation.

Following data from the United States that shows more economic deterioration, which rekindled recession fears, the EUR/USD rises, recouping some of its losses from Wednesday. As a result, risk-averse investors purchased the Euro (EUR) at the expense of the dollar. The EUR/USD trades at 1.0969, above its opening price by 0.14%.

Wall Street is still experiencing losses as worries about an impending recession in the US intensify. Although US Fed officials had repeated that a recession was not their base scenario, the most recent round of data indicated a slowdown in the economy.


Data from the Department of Labour (DoL) showed that Initial Jobless Claims increased by 245K, above predictions of 240K, for the week ending on April 15. The manufacturing index fell -31.3 points below March’s reading of -23.3, according to data from the Philadelphia Fed, signalling a slowdown in industrial activity in the mid-Atlantic region and putting pressure on the dollar.

The latest round of US data was that Existing Home Sales dropped 2.4% to a seasonally-adjusted annual rate of 4.44 million in March.