Forex Signals on Forex – Dollar Edges Higher – The U.S. dollar edged higher in early European trade Wednesday, with the tone cautious given the event risk, including a central bank meeting and key U.S. unemployment data, later this week.

At 2:40 AM ET (0640 GMT), the U.S. Dollar Index, which tracks the greenback against a basket of six other currencies, stood at 99.925, up 0.2%, while EUR/USD fell 0.2% to 1.0822. GBP/USD edged lower to 1.2432 and USD/JPY fell 0.2% to 106.39.

“While a clear blow to the ECB and not least the European Court of Justice, for now the bond purchases will continue unaffected,” said Danske Bank, in a research note. “We think the primary market concern lies in the potential limitations that this verdict may hold for the ECB in the future amid lack of eurozone fiscal cooperation.”

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This comes as German factory orders slumped 15.6% in March, their biggest monthly decline since German reunification in 1990, as the coronavirus slashed domestic and foreign demand for goods from Europe’s biggest economy.

Sterling has also edged lower ahead of Thursday’s Bank of England meeting. The U.K.’s central bank has announced a wide range of measures since the beginning of the coronavirus crisis, including slashing rates  to record lows and ramping up its quantitative easing program to £645 billion.

With this in mind, new stimulus is unlikely to be unveiled Thursday, but the foreign exchange market will be keeping a wary eye on the bank’s updated macroeconomic projections and comments regarding the possibility of a further increase in the QE program down the line, particularly as incoming economic data looks so weak.

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Later in the session sees the release of  ADP (NASDAQ:ADP)’s private sector employment report for April, the first full measure of a month the country spent on lockdown restrictions, ahead of Friday’s non-farm payrolls. This should give a flavor about the rise in U.S. unemployment during the month and whether government support measures such as the Paycheck Protection Program targeting small and medium-sized enterprises are having any positive effects on layoffs.

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