The Euro to US Dollar (EUR/USD) exchange rate has continued to trend lower as an attack on Paris took place.
A manhunt is now under way in the nation’s capital after three armed men took to the headquarters of satirical magazine Charlie Hebdo, killing 12 people.
Earlier… The Euro to US Dollar (EUR/USD) exchange rate extended its losses during Wednesday’s European session ahead of the Federal Open Market Committee (FOMC) meeting minutes release.
Investors and economists are hoping for some insight into the language change adopted by the Federal Reserve in its latest interest rate statement.
Industry expert and former Fed official Roberto Perli suggested that the FOMC probably showed ‘broad agreement on the language change and probably some more confidence n a mid-2015 liftoff. There might be also some discussion about eventually communicating their views of the pace of tightening once lift-off happens.’
Earlier… The Euro to US Dollar (EUR/USD) exchange rate declined during Wednesday’s trading as the Eurozone officially entered deflation.
The Eurozone saw its Consumer Price Index (CPI) drop from 0.3% to -0.2% in December on the year, slipping past the -0.1% forecast.
Wednesday’s weak figures place the European Central Bank (ECB) under more pressure than ever to take aggressive action to revive the flat-lining economy.
Earlier… The Single Currency could be subjected to heavy losses today as The Euro to US Dollar (EUR/USD) exchange rate began Wednesday’s European session in a tight range ahead of German unemployment and inflation figures and US Federal Reserve meeting minutes.
German Labour Market Improving Offering Euro (EUR) Exchange Rate Support
However, Germany surprised economists’ forecasts when Unemployment Change recorded a massive -27K in December, in opposition to the -5K predicted.
In addition, the Unemployment Change figure was strong enough to push the Unemployment Rate down from 6.6% to 6.5%. The upbeat figures may offer the Euro to US Dollar (EUR/USD) exchange rate some support.
The highly influential Eurozone Consumer Price Index (CPI) ecostats are out later in the session.
Earlier… The Euro to US Dollar (EUR/USD) exchange rate recorded losses in the second half of Tuesday’s European session, despite US ISM Non-Manufacturing Composite figures coming in below forecasts.
The index slipped from 59.3 to 56.2 in December, slipping past initial 58.0 predictions.
Economist Paul Dales stated: ‘Don’t interpret this survey as a sign that the outlook has weakened. On the contrary, the further fall in oil prices has actually made things even better.’
Earlier… The Euro to US Dollar (EUR/USD) exchange rate remained in a narrow range as Markit’s final Eurozone figures were released and French Consumer Confidence rose more than forecast.
France’s December Consumer Confidence reading came in at 90, a moderate increase from November’s 88. Furthermore, it’s the highest sentiment score for the nation since mid-2012.
The French Composite Purchasing Manager’s Index (PMI) also rose above forecasts residing at 49.7 instead of the initial 49.1 prediction.
The Euro recovered some losses against the US Dollar as Monday’s European trading came to a close with a smaller market movement of -0.68%. The Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1917.
Earlier… The Euro to US Dollar exchange rate extended its losses during Monday’s European trading reaching a nine-year low with a market movement of -0.85%.
Currency strategist Roberto Mialich stated: ‘It’s very hard to imagine something that can convince the market that the Euro is not a selling opportunity at this juncture. The market continues to speculate that the ECB will start QE this month. Clearly the election in Greece probably complicates the agenda for Draghi.’
Earlier… The Euro to US Dollar (EUR/USD) exchange rate was trending lower as Monday’s European session opened and investors forecast the introduction of stimulus measures from the European Central Bank (ECB).
The Euro hit lows of $1.1864 versus the ‘Buck’, its weakest exchange rate since March 2006.
ECB Monetary Stimulus Speculation Pressures Euro (EUR) Exchange Rate Lower
ECB President Mario Draghi caused a kerfuffle last week when he hinted that the central bank will be making policy adjustments in the near future.
Draghi stated: ‘We are making technical preparations to alter the size, pace and composition of our measures in early 2015.’
Another factor pressuring the Euro exchange rate lower is the fear that Greece could leave the Eurozone. Despite Germany believing that the Eurozone (and by extension the Euro) could handle a Greek exit, others are less optimistic.
Many economists have speculated that if Greece does leave the 18-nation Euro area and benefits from the separation, other nations may also want to exit.
Economic advisor for German Chancellor Angela Merkel, Peter Bofinger, has stated that any exit from Greece could be a ‘very high risk’ situation for the rest of the currency union.
Bofinger stated: ‘Even if the situation cannot be compared with the other Euro members, a genie would be let out of the bottle that would be hard to control.’
Meanwhile, the US Dollar exchange rate experienced a disappointing close to the end of last week after US ISM Manufacturing figures came in lower than expected. The December index fell to 55.5 from November’s 58.7, defying economists’ predictions of a softer drop to 57.5.
Factory sector growth hit six-month lows, offering further support to the argument that a global slowdown is taking place.
One issue affecting shipping is the current labour negotiations in West Coast sea ports which are hindering material imports.
One industry expert stated: ‘West Coast port issues have greatly impacted our incoming materials. We are air freighting many parts from Japan and Asia to support production while parts sit at the dock.’
Euro to US Dollar (EUR/USD) Exchange Rate Forecast
The Euro to US Dollar exchange rate (EUR/USD) is likely to continue experiencing the effect of ECB speculation in the days ahead.
EUR/USD exchange rate movement could also be occasioned by the Eurozone’s Sentix investor confidence report and Germany’s inflation data.
Federal Reserve official John Williams is also scheduled to speak on the US economy later in Monday’s session, which could see additional fluctuations in the EUR/USD currency pair.
Meanwhile, any further political advancement in Greece which could spur further speculation on a Greek exit could also see Euro to US Dollar movement.
The Euro to US Dollar (EUR/USD) exchange rate is trending in the region of 1.1949. The US Dollar to Euro (USD/EUR) exchange rate is reaching 0.8370.
