The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.3394, hitting a low of 1.3346 and a high of 1.3403. Movement at this time is around 0.21% which is a result of unhealthy European Gross Domestic Product (GDP) data.
Yesterday was reasonably static for the Euro with the majority of the domestic data releases matching forecast figures. A slight drop in demand can be related to year-on-year Eurozone industrial production which posted a flat line figure compared to the forecast 0.2%.
US domestic data was less forgiving yesterday. MBA Mortgage applications posted a hefty drop from 1.6% to -2.7%. More significantly detrimental was the Advance Retail Sales figures; forecast to show a retail sales gain of 0.2% the actual data was a disappointing flat at 0.0%.
Despite both the US Dollar and the Euro showing moderate declines against many of their major peers, trader focus was drawn towards the exceptionally dismal performance of the Pound.
Today has been a highly volatile day for the Euro and the European economy is feeling the pinch from a set of poor Gross Domestic Product data.
German Gross Domestic Product was forecast to drop from 2.5% to 1.4%; a drop which already highlighted German economic struggles. The actual result saw a massive declination; posting a result of 0.8% which had, almost instantly, driven movement downward for the Euro.
To add insult to injury the Eurozone Gross Domestic Product also posted a slight loss from 0.9% to 0.7%, although this was forecast accurately.
Year-on-year French Gross Domestic Product was forecast to dip to 0.3% from the former figure of 0.8%; however the result was a less than ideal at 0.1%. Ordinarily the French GDP would only have a mild influence on the movement of the Euro, but this data was fuel to an increasingly ill-tempered fire.
This GDP data is likely to up pressure on the European Central Bank (ECB) to increase stimulus. Thomas Harjes, senior European economist at Barclays Plc in Frankfurt, stated; ‘There’s a big chance they will have to revise their growth and inflation figures in September.’
Similarly the US domestic data posted today was also unsatisfactory which hasn’t helped to repair the damage of yesterday’s advance retail sales.
Continuing Claims showed an unwanted increase to 2,544,000 despite having been forecast to drop to 2,500,000 from 2, 519,000. Also Initial Jobless Claims data has seen an upsurge from the previous figure of 290,000 to 311,000. It is important to note that initial jobless claims data is extremely volatile and the average is therefore monitored every four weeks.
Although the US data was below par the Euro to US Dollar exchange rate has remained bearish; European anguish outweighs that of the US considerably.
The Euro to USD exchange rate has hit a low today of 1.3346.
Forecast for the Euro to US Dollar Exchange Rate
The Euro is likely to continue on its downward trend tomorrow as there are no European domestic data releases scheduled. It is therefore most likely that any movement will be connected to geopolitical issues.
There are several influential US domestic data releases tomorrow; chief of which, in terms of economic weighting, is the University of Michigan Confidence report which is forecast to gain from 81.8 to 82.5. Other data releases to watch for are; PPI Final Demand, Net Long-term TIC Flows (which will give valuable insight into foreign demand for the Dollar and American investments), Industrial Production and Manufacturing Production.
The Euro to US Dollar exchange rate has hit a high today of 1.3408.
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