The Euro to US Dollar exchange rate is currently trending in the region of 1.3142.
European manufacturing data may not have met with forecast figures but, having avoided slipping into contraction territory, the Euro has strengthened a little versus the US Dollar. This is most likely due to the fact that Monday’s US economic calendar is empty.
The single currency struggled across the board last week with a combination of increasingly poor economic data publications, a bullish US Dollar and rising geopolitical tensions.
Friday’s mixed-bag of European economic data publications did not help the single currency over the weekend. Year-on-year German Retail Sales showed a growth of only 0.7% despite having been forecast to increase by 1.5%.
Both the Core and Estimate Eurozone Consumer Price Index publications produced positive results: the former gaining 0.1% on forecast and the latter meeting the anticipated percentage of 0.3%. Eurozone Unemployment Rate also remained faithful to the forecast figure of 11.5%.
Unemployment in Italy showed unwanted growth to 12.6%, but the year-on-year Consumer Price Index was consistent with the forecast having grown by 0.1% in August. Also the yearly Italian Gross Domestic Product showed second quarter growth of -0.2% having been forecast stay in line with the previous figure of -0.3%.
Despite having had a few positive domestic data results, particularly Eurozone economic data, the Euro continued its bearish run versus the majority of its peers. This was primarily due to the rising geopolitical tensions between Russia and Ukraine, and also the increasing likelihood of further European Central Bank stimulus.
Friday’s North American economic data was similarly mixed to that of Europe, although the US Dollar continued to surge on the back of Thursday’s better-than-expected Gross Domestic Product growth.
The US Core Personal Consumption met with the forecast figure of 1.5% having shown a 0.1% growth in July. However, Personal Income fell below estimations of 0.3% to 0.2%, and Personal Spending also failed to meet target, with the forecast figure of 0.3% showing contraction of -0.1%.
The Chicago Purchasing Manager Index gained from the previous figure of 52.6 to 56.5, but failed to meet with the forecast 64.3. The University of Michigan Confidence survey produced a better-than-expected result having risen to 82.5 from the previous figure of 79.2.
The Euro to US Dollar exchange rate has hit a low today of 1.3116.
Monday’s European data has, once again, been mostly disappointing. Despite this the Euro to US Dollar exchange rate has strengthened since the early hours, which is likely to be attributed to a combination of the lack of US economic data and trader profit-taking.
Italian manufacturing failed to meet with expectations having retracted to 49.8 from 51.9. French manufacturing output, however, rose above the forecast figure of 46.5 to 46.9.
German manufacturing output has left a lot to be desired and is a continuation of the recent run of less-than-impressive German domestic data publications.
The German Manufacturing PMI was forecast to remain at the previous figure of 52, but the actual data showed a declination to 51.4.
Oliver Kolodseike, a Markit economist, commented; ‘Official data showed that industrial production fell 1.5% in the three months to June, the sharpest drop in nearly one-and-a-half years. PMI data meanwhile suggest that it is unlikely that the strong growth rates seen earlier in the year will return in the coming months’.
Eurozone manufacturing data also failed to impress having fallen below the forecast of 50.8 to 50.7.
The cooling Eurozone manufacturing output could potentially have a detrimental effect on the strength of Pound Sterling given their close trading relationship.
With nothing by way of economic data pertaining to North America on Monday, the ‘Buck’s’ (USD) movement is likely to be dictated by foreign currency changes.
The Euro to US Dollar exchange rate has reached a high today of 1.3146.
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