The Euro to US Dollar (EUR/USD) exchange rate was trending higher in Thursday’s trading after the Federal Open Market Committee (FOMC) interest rate hike statement, and ahead of the Eurozone Consumer Price Index (CPI), German Unemployment Rate and Unemployment Change stats.
However, the French Producer Price Index (PPI) came in at 0.1% in March after the previous month’s 0.7%.
Earlier… The Euro to US Dollar (EUR/USD) exchange rate was trading higher after the US Gross Domestic Product (GDP) ecostat came in far lower than forecast at only 0.2%.
The annualised first quarter 0.2% figure caused further problems for the US Dollar to Euro (USD/EUR) exchange rate and gave support to those expecting the US Federal Reserve to keep rates on hold into 2016.
However, not everyone’s as pessimistic.
Economist Paul Ashworth stated: ‘Most Fed officials appear to share our view that this is a temporary slowdown, albeit a more severe deceleration than we previously anticipated. Accordingly, while it might delay the timing of the first rate hike, we still anticipate a lift-off later this year.’
Earlier… The Euro to US Dollar (EUR/USD) exchange rate climbed in Wednesday’s European session as ‘Greenback’ sentiment declined on the back of weaker-than-forecast US Consumer Confidence on Tuesday, as well as in anticipation for Wednesday’s Gross Domestic Product (GDP) stats later in Wall Street trading.
US Dollar to Euro (USD/EUR) Exchange Rate Forecast
The weaker-than-forecast US data has caused investors to speculate that a rate hike before 2016 is unlikely, a factor that’s weighed significantly on the US Dollar exchange rate.
Currency expert Thomas Averill commented: ‘Because of the poor recent economic data, the market is pretty much pushing out to 2016 now before the Fed moves. The big sell-off in the US Dollar that we’ve seen over the last few weeks has reflected how long the market was. I’d probably be leaning towards more of a pause in the Dollar-bull trend rather than a complete reversion of it.’
Tuesday saw US Consumer Confidence slip from 101.4 in April to 95.2, the move saw the US Dollar exchange rate slipped lower as economists had expected a rise to 102.5.
The disappointing ecostat pressured the ‘Buck’ exchange rate lower amongst other currency majors as investors forecast the possibility of delays in US Fed rate hikes.
But will Wednesday be another day of US Dollar disappointment? This entire week will be testing for the US Dollar exchange rate with important data due out every day. Wednesday’s highly influential US Gross Domestic Product (GDP) figure is forecast to drop from an annualised 2.2% to 1.0% in the first quarter, while the non-annualised stat is predicted to climb from 0.1% to 0.5%.
Conference Board is now the lowest of the 3 US CCI pic.twitter.com/XsGncHm8MF
— Theodore Stanton (@TTStanton) April 28, 2015
US Personal Consumption data is also due out on Wednesday and could impact the US Dollar to Euro (USD/EUR) exchange rate significantly. However, perhaps the real make or break event will be the Federal Open Market Committee (FOMC) interest rate decision later in Wall Street Trading.
Although the Federal Reserve is expected to keep rates at 0.25%, the follow-up statement could be crucial for US Dollar movement. If any dovish tones emerge, the ‘Buck’ could sink against the Euro (USD/EUR) and a host of other majors.
It’s unlikely any hawkish tones would emerge after the recent string of poor US data, but if any were used by policymakers the ‘Greenback’ could be in for a rally.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast
Meanwhile, the Euro is extremely sensitive to developments in Greece as the nation attempts to renegotiate its austerity deal with lenders. The nation has been dragging its heels for the latter four months since leftist party Syriza was voted into power.
The start of this week saw the Greek government mix up it’s negotiating team in an attempt to spur progress.
* EU's Moscovici says reshuffle of Greek negotiating team is a "good sign" – RTRS
— Fabrizio Goria (@FGoria) April 29, 2015
Today Greece is due to present its reform bill to its creditors in order to kick-start talks following a negotiation team shakeup at the start of the week.
Meanwhile, final Eurozone confidence figures put on a mixed performance, with Economic Sentiment and Business Confidence both rising amid a fall in Consumer Confidence and Industrial Sentiment.
Still to come from the Eurozone are Germany’s Consumer Price Index (CPI) numbers which could cause massive Euro to US Dollar (EUR/USD) exchange rate movement.
The US Dollar to Euro (USD/EUR) exchange rate is trending in the region of 0.8991; the Euro to US Dollar (EUR/USD) exchange rate is trading at 1.1245.
