Euro US Dollar (EUR/USD) Exchange Rate Slips as USD Rebounds
The Euro US Dollar (EUR/USD) exchange rate ticked lower today, trimming this week’s gains, as the US Dollar (USD) recovers from cooler inflation figures earlier in the week.
EUR/USD is currently trading at around $1.027, down from a five-week high of $1.0363.
US Dollar (USD) Recovers from Inflation-Induced Drop
The US Dollar is staging a modest recovery today after seemingly entering oversold conditions.
USD witnessed some selling pressure earlier in the week after the latest US inflation figures dampened bets for Federal Reserve rate hikes.
However, since then, several Fed officials have reaffirmed their commitment to bringing inflation down.
Shortly after Wednesday’s data, Fed policymaker Mary Daly said:
‘There’s good news on the month-to-month data that consumers and business are getting some relief, but inflation remains far too high and not near our price stability goal’.
USD fell to a five-week low against EUR in response to the inflation data, but traders have continued to reposition since then. Today it looks as though markets believe USD has been oversold.
Euro(EUR) Declines despite Strong Production Data
Meanwhile, the Euro (EUR) is slipping today, despite better-than-expected industrial production figures out of the Eurozone.
In June, the bloc’s production output grew by 0.7%, beating forecasts of 0.2%.
However, this upbeat economic data failed to lift EUR against USD.
Concerns about the European gas crisis are ever-present, preventing the single currency from pushing too high against the ‘Greenback’.
Although EUR/USD has dropped today, it still clings on to most of the week’s gains.
EUR/USD Exchange Rate Forecast: Euro to Lose More Ground?
This afternoon, an expected rise in US consumer sentiment may help the US Dollar rise further.
Next week we have some potentially high-impact economic data from both the Eurozone and the US.
One of the most notable releases on the calendar for EUR investors will be Germany’s ZEW economic sentiment index. Forecasters expect morale to remain near a ten-year low, which could hurt EUR.
