Whilst traders await the European Central Bank interest rate decision, the Euro to US Dollar (EUR/USD) exchange rate is currently trending within a narrow range. A slight sling currency appreciation is as a result of positive German Construction PMI data, which increased from 51.5 to 53.5. The US Dollar, meanwhile, is generally holding in a high position after the Federal Reserve Beige Book signalled widespread employment growth.
The Euro to US Dollar exchange rate is currently trending in the region of 1.2321.
Yesterday….
After European economic data printed relatively disappointingly on Wednesday, the Euro to US Dollar (EUR/USD) exchange rate dived by around -0.66%. The US Dollar, meanwhile, has continued its bullish run after non-manufacturing data improved upon the market consensus.
The Euro to US Dollar exchange rate is currently trending in the region of 1.2309.
Eurozone Retail Sales printed disappointingly on Wednesday, causing the shared currency to slump against the majority of its most traded rivals. Retail Sales were forecast to increase from 0.5% to 1.6%, but the actual result only reached 1.4%.
The US ISM Non-Manufacturing Composite improved upon the median market forecast, causing the US Dollar to appreciate against its major peers. The Non-Manufacturing Composite hit 59.3, eclipsing the market consensus of a rise from 57.1 to 57.5.
Euro (EUR) Stumbles on Mixed Data
Wednesday’s European ecostats produced varied results, causing the common currency to soften. The Eurozone and French Services and Composite PMIs declined from previous figures in November. The German Composite PMI also softened, although the Services PMI remained unchanged from the initial estimate. Italian Services and Composite PMIs, however, did advance in November.
With regard to the Eurozone Composite PMI, Chris Williamson, Chief Economist at Markit, stated; ‘The final Eurozone PMI came in even weaker than the earlier flash estimate, signalling the weakest pace of expansion since July of last year. The survey data suggest the region is on course to see a mere 0.1% GDP growth in the final quarter of the year, with a strong likelihood of the near-stagnation turning to renewed contraction in the New Year unless demand shows signs of reviving.’
The Euro to US Dollar exchange rate has fallen to a low today of 1.2321.
US Dollar (USD) Advances on Oil Prices
Low crude prices could significantly benefit US Gross Domestic Product, adding pressure on the Federal Reserve to normalise monetary policy. ‘The divergence in monetary policies hasn’t changed, and there will be additional benefit for the US economy from cheaper energy prices,’ said Masakazu Sato, a Tokyo-based currency adviser at Gaitame Online Co. ‘There is room for the Dollar to rise further.’
Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Decline
With several important US data publications due later on Wednesday, there is a heightened chance of US Dollar volatility. However, with the ISM Non-Manufacturing Composite forecast to tick higher, the EUR/USD exchange rate is likely to continue trending lower.
The Euro to US Dollar exchange rate has reached a high today of 1.2391.
US Dollar (USD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
US Dollar,
,Swiss Franc,0.9753,
US Dollar,,Euro,0.8110,
US Dollar,,Pound,0.6384,
US Dollar,,New Zealand Dollar,1.2869,
Swiss Franc,,US Dollar,1.0259,
Euro,,US Dollar,1.2329,
Pound Sterling,,US Dollar,1.5663,
New Zealand Dollar,,US Dollar,0.7770,
[/table]
