The Euro (EUR) managed to firm away from an eight-month low against the US Dollar (USD) on Monday but remained under heavy pressure on concerns over the diverging monetary policies of the European Central Bank and US Federal Reserve.
The US Dollar eased slightly against the single currency and weakened against the Pound and other major peers after the US National Association of Realtors released a report which showed that pending home sales in the world’s largest economy fell by 1.1% in June, a figure which was worse than the 0.5% gain forecast by economists.
Year-on-year home sales dropped by 4.5% in June a figure which wasn’t quite as bad for expectations for a drop of 5.2%.
A report published by Markit restrained further losses for the ‘Greenback’ after it showed that the USA’s services sector remained at its highest level in 4-1/2 years this month.
Markit’s services PMI came in at 61.0 in July, matching June’s figure and was better than the 59.8 reading forecast by economists.
Despite ticking higher the Euro is likely to remain at monthly lows against the US Dollar and other peers such as the Pound as recent data continues to paint a disappointing picture of the Eurozone economy.
Demand for the US Dollar will be continued to be sustained ahead of this week’s major data releases such as the latest Federal Reserve policy meeting statement and GDP data due on Wednesday.
Also out this week is the USA’s newest unemployment data.
An improvement in those figures will likely send the ‘Greenback’ to new highs against the Euro.
The Pound could make gains against the Euro on Tuesday if the latest housing data comes in positively. Mortgage lending, mortgage approvals and BOE Consumer credit data is all due for release.
UPDATED 10:20 GMT 29 July, 2014
Euro to US Dollar Exchange Rate Trends in Narrow Range
Yesterday the Common Currency was able to record a modest gain against the US Dollar as US Pending Home Sales data registered an unexpected decline.
However, losses in the EUR/USD pairing were limited as separate figures showed that the UK’s manufacturing sector expanded at the most rapid pace for over four-years in July.
With economic reports for the Eurozone lacking today, the main cause of volatility in the Euro to US Dollar (EUR/USD) exchange rate is likely to be the US Consumer Confidence Index, due out 15:00 GMT.
The index is expected to come in at 85.4.
UPDATED 10:05 GMT 30 July, 2014
EUR/USD Softer after Consumer Confidence Data
The Euro to US Dollar exchange rate weakened during yesterday’s North American session as the US Consumer Confidence gauge came in at a seven-year high.
Economists had expected the sentiment measure to achieve 85.4 but it actually romped to 90.9 in July from a positively revised 86.4 in June.
With German inflation and Eurozone confidence figures due out in the hours ahead the EUR/USD pairing is likely to experience notable movement.
However, if today’s US reports (including the nation’s second quarter growth data) surprise to the upside the Euro to US Dollar exchange rate may plummet.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.3403.
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