The Euro to US Dollar (EUR/USD) exchange rate advanced by around 0.30% on Friday after a New York Doctor was diagnosed with the Ebola virus. Such is the extent of the concern of the virus becoming a pandemic; the US Dollar has declined across the board irrespective of a positive result in domestic home sales. Despite the gain it holds over the flagging US Dollar, the common currency has slumped against the majority of its most traded peers amid concerns over the European Central Bank stress test.
The Euro to US Dollar exchange rate is currently trending in the region of 1.2683.
Sentiment towards the European Central Bank has been shaky at best over the past few months. ECB President Mario Draghi was affectionately titled ‘super Mario’, but it seems he may be close to game over with his continued pronouncements of doing ‘whatever it takes’ to shore up the stagnating Eurozone economy.
No matter what stimulus measure is employed by the ECB, nothing seems to preventing economic disparity within the 18-nation currency bloc. This was evidenced by Eurozone data on Thursday which, at first glance, looked positive until the accompanying report indicated otherwise.
Chris Williamson, Chief Economist at Markit, said; ‘While the survey suggests the Euro area has so far avoided a slide back into recession this year, a renewed downturn cannot be ruled out. Growth is so anaemic that increasing numbers of companies are being forced into laying off staff and slashing prices in an attempt to cut costs and boost sales through discounting.’ He concluded by stating; ‘The survey data are broadly consistent with GDP rising 0.25% in the third quarter, but unless demand picks up soon, growth could weaken again in the fourth quarter and deflationary forces could intensify.’
A mixed-bag of US data on Thursday saw the US Dollar make humble gains against its major peers. Of particular detriment, however, was the preliminary result for October’s Manufacturing PMI which cooled from 57.5 to 56.2.
The Euro to US Dollar exchange rate has dropped to a low today of 1.2632.
On Friday both the US Dollar and the Euro have declined against the majority of their most traded currency rivals irrespective of positive domestic data.
German Consumer Confidence advanced from 8.4 to 8.5 in spite of the market consensus foreseeing a drop to 8.0. However, with anxieties over what the results of the ECB stress test on Eurozone banks will show, the single currency has struggled to capitalise on said data.
Similarly, the US Dollar has declined despite a good result in New Home Sales, which avoided dropping from 15.2% to -6.8% with the actual result only falling to 0.2%. The lack of Dollar demand can be attributed to a new case of Ebola in the US which has afflicted a New York doctor.
Euro to US Dollar Forecast to Hold
With sentiment towards both the Euro and the US Dollar taking a negative turn, it is unlikely that there will be much volatility for the EUR/USD exchange rate.
The Euro to US Dollar exchange rate has reached a high today of 1.2696.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,US Dollar,1.2667,
Euro,,Canadian Dollar,1.4220,
Euro,,Pound,0.7874,
Euro,,Australian Dollar,1.4397,
US Dollar,,Euro,0.7893,
Canadian Dollar,,Euro,0.7032,
Pound Sterling,,Euro,1.2690,
Australian Dollar,,Euro,0.6946,
[/table]
