- Single currency appreciates against USD – Possible support from Italian stats
- Warning comes from ECB official – Praet voices concerns over bank profitability
- US Dollar slides against peers – Prior poor data may be to blame
- Further data due from Eurozone and US – Eurozone trade data and US Fed speeches
The Euro has been positive against a number of rivals including the US Dollar of late, although sizable losses have also been recorded for the common currency.
The US Dollar has generally been low on recent national economic data.
Eurozone Economic News: Recent Italian Data Enthuses Investors
The Euro has been making gains in a number of exchange rate pairings of late, which have included a repeated small advance against the US Dollar (EUR/USD) and gains of 0.6% against the Japanese Yen (EUR/JPY).
The day’s Eurozone news has been fairly limited so far, with the most notable announcement consisting of the earlier rise in the Italian trade balance for March, which shifted from a previous 3.86bn to 5.36bn.
In other news, the appeal of the Euro has been reduced by recent comments from the European Central Bank’s (ECB) Peter Praet that:
‘We have in the [Eurozone banking] sector a severe profitability shock’.
US Dollar Flops against Peers after Falling Domestic Data and Kashkari Speech
The ‘Buck’ has been generally unstable against its peers of late, having slipped by -0.3% against the Swedish Krona (USD/SEK) and the Russian Ruble (USD/RUB) along with a number of other emerging market and commodity currencies, such as the Turkish Lira (TRY).
Possible causes for this recent spate of US Dollar dovishness include yesterday’s domestic data results, which consisted of a falling Empire State manufacturing result for May as well as a dip in the NAHB housing market index for the same month.
More recently, Fed official Neel Kashkari has spoken further on allowing national banking institutions to collapse without costing the taxpayer in the event of a financial crisis, which has only served to unnerve investors.
Future EUR, USD Forecast: US Data Glut could Eclipse Euro Trade Stats
The remainder of the day will bring economic announcements from both the Eurozone and the US, although at the time of writing the latter set of contributions seemed set to vastly outweigh the impact of the former.
The remaining Eurozone news of note will consist of the trade balance results for March; as of writing, the only forecast has been for a seasonally-adjusted rise from 20.2bn to 22bn.
Among the spate of US ecostats will be the April housing starts and building permits results, as well as the inflation rate outcome and industrial and manufacturing production outcomes for the same month. Inflation is expected to rise in its base annual state but dip slightly for the variant excluding food and energy on the year.
Later on will be trio of Fed speeches, coming from John Williams, Dennis Lockhart and Robert Kaplan.
Current EUR, USD Exchange Rates
The Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1333 and the US Dollar to Euro (USD/EUR) exchange rate was trending in the region of 0.8823 today.