EUR/USD Continues Downtrend as Greek’s Strike Against Austerity Measures
The Greek bailout is causing further tension between the government and policymakers as workers across the country walk out in protest against austerity. 25,000 protesters have gathered in Athens and schools, banks and hospitals have had to close due to strike action. The EUR/USD exchange rate is trending 0.4% down at a low of 1.0689.
Earlier…
EUR/USD Exchange Rate Volatile as News of Portuguese Government Collapse Weighs Heavily on the Eurozone
Portugal’s centre-right coalition government has tumbled in the face of left-wing opposition to its programme, adding to trader market fears sparked by a further dispute over Greek bailout conditions. Less than two weeks after taking power, the coalition government was beaten by 123 votes to 107 when presenting its programme, leaving President Anibal Cavaco Silva to decide whether to hold new elections or invite the Socialists to form a government. The latter could see Portugal under the control of a party committed to cutting austerity measures.
Speaking of the potential coalition’s plans, PS Member of Parliament Mário Centeno said,
‘It’s not easy to reduce our approach to two or three slogans. We will continue to bring down the deficit and debt, but at a slower pace. This will create the economic space needed to alleviate the very serious financial restraints families and companies face.’
The news weighed heavily on the markets, with traders already cautious thanks to fresh disputes over the next payment of Greece’s third EU bailout. Prime Minister Alexis Tspiras is trying to renegotiate conditions which would grant lenders more power to repossess homes.
The EUR/USD exchange rate is currently experiencing little movement, trending between 1.0727 and 1.0774.
USD/EUR Exchange Rate Bearish: US Dollar Fails to Capitalise on Eurozone Fears as Traders Wait for US Unemployment Data
Despite political uncertainties weakening the common currency, which usually sees the ‘Greenback’ strengthen, the USD/EUR exchange rate has experienced little movement as traders await tomorrow’s unemployment data. Last week’s Non-Farm Payrolls showed better-than-forecast figures, with 271k new jobs created, causing the US Dollar to shoot up across the board. A combination of trader cash-in and fears that overvaluation would harm the chance of a rate hike by the Federal Reserve saw demand for the US Dollar cool shortly after.
The USD/EUR exchange rate is currently trending between 0.9280 and 0.9317.
EUR/USD Exchange Rate Forecast: Positive US Employment Data Could See Euro Downtrend
Tomorrow’s US Initial Jobless Claims and Continuing Claims reports could weaken the common currency if the data is positive. Positive employment figures, combined with the previous week’s NFP, would demonstrate a strengthening of the US economy. This would further increase the likelihood of a December rate hike as suggested by the Federal Open Market Committee (FOMC) and see significant gains for USD/EUR.
Conversely, the European Central Bank (ECB) had previously hinted that it would review its economic stimulus package in December. With many considering a Fed rate hike to be inevitable, it is ECB policy which casts uncertainty on the EUR/USD market. A speech later today by ECB President Mario Draghi could give the markets fresh direction.
The EUR/USD exchange rate is currently trending around 0.0744.
