In anticipation of both European and US economic data, the Euro to US Dollar (EUR/USD) exchange rate softened by around -0.23%. US construction data is forecast to increase, whereas Eurozone inflation data is expected to decline. Should the Eurozone data meet with expectations, the European Central Bank will be pressurised into action in order to avoid deflation.
The Euro to US Dollar exchange rate is currently trending in the region of 1.2444.
Yesterday…
After data pertaining to North America printed disappointingly on Monday, the Euro to US Dollar (EUR/USD) exchange rate advanced by around 0.30%. Cooling manufacturing has been the primary contributor to the US Dollar declination, whilst the Euro has slumped against many of its rivals as a result of soft German manufacturing.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.2480.
German Manufacturing sees Euro (EUR) Soften
Although the common currency is currently trending higher against the US Dollar, negatively revised European data caused the Euro to soften against the majority of its rivals early in the European session. The Italian, German and Eurozone Manufacturing PMIs all failed to meet with the market consensuses. Of particular disappointment was the German Manufacturing PMI which dropped from 50 to 49.5, moving below the level which separates growth from contraction.
Oliver Kolodseike, economist at Markit, said; ‘German manufacturers continued to record growth of production in November, but this expansion seems to be based on increasingly shaky foundations. In particular, output expanded despite lower backlogs, falling stocks of finished goods and the sharpest drop in new orders for almost two years.’
The Euro to US Dollar exchange rate has declined to a low today of 1.2418.
US Manufacturing sees ‘Greenback’ (USD) Slide
American data has printed poorly, causing the US Dollar to decline against all but one of its major peers. ISM Prices Paid declined beyond the median market forecast of a drop from 53.5 to 52.5, with the actual result falling to 44.5. ISM Manufacturing softened from 59 to 58, and the Markit Manufacturing PMI ticked a little higher from 54.7 to 54.8.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Strengthen
If the US manufacturing data prints disappointingly, it will ease pressure on the Federal Reserve to normalise monetary policy which, in turn, will see the US Dollar tumble against its major peers.
Therefore, given that the data is forecast to soften, the EUR/USD exchange rate is likely to strengthen.
The Euro to US Dollar exchange rate has advanced to a high today of 1.2480.
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,0.9632,
US Dollar,,Euro,0.8009,
US Dollar,,Pound,0.6349,
US Dollar,,New Zealand Dollar,1.2676,
Swiss Franc,,US Dollar,1.0383,
Euro,,US Dollar,1.2486,
Pound Sterling,,US Dollar,1.5751,
New Zealand Dollar,,US Dollar,0.7888,
[/table]
