- EUR appeal mixed despite French unemployment drop – Varied expectations of incoming inflation rate stats
- GBP drops off ahead of retail sales stats – Monthly positive and annual negatives forecast
- USD slides after Fed minutes – Another Fed speech due tonight
The Euro has opened trading on Thursday in an uncertain position, having only been influenced so far by a drop in the French unemployment rate from 10.2% to 9.9%. The next Eurozone data to watch out for is due shortly, when the Eurozone construction output and inflation rate results for July are due. As of writing, forecasts have been for rising inflation on the year but a falling figure on the month.
The Pound has fluctuated as much as the Euro as trading has opened, falling against the single currency but rising against the US Dollar. This is likely due to investor tensions about the incoming UK data, which will focus on retail sales recorded in July.
The US Dollar has been in a clear state of decline in exchange rates, having been softened overnight by apparent divisions seen in the Fed’s July minutes over whether a September interest rate hike should take place. In addition to claims results and Philadelphia’s manufacturing index coming out, the US Dollar could also be shifted later on when Fed official John Williams gives a speech during the night.
(Last updated August 18th, 2016)
The Pound (GBP) was in a rare state of high demand after the UK’s jobs data bettered forecasts yesterday, while the US Dollar (USD) steadily appreciated in response to the hawkish tone of a Fed official.
Eurozone Economic News: Euro Steady despite Signs of Pressure in the Eurozone
Euro Pound (EUR GBP) and Euro US Dollar (EUR USD) exchange rates performed well on Wednesday, hitting respective highs of 0.86 and 1.12.
This positivity came against the lack of any major Eurozone data; the most notable announcement consisted of Latvia posting a Q2 unemployment rate drop from 10.3% to 9.5%.
Other news relating to the Eurozone came from Greece and further afield; in the former case, news emerged that Greek Prime Minister Alexis Tsipras was continuing the efforts of previous administrations to claim financial reparations from Germany, an extremely controversial stance given that the grievances all date back to the Second World War.
Renowned economist Joseph Stiglitz also commented on the Eurozone situation, putting across the case for a ‘split Euro’, consisting of ‘strong Northern’ and ‘softer Southern’ forms.
Remarking on the sometimes acrimonious relationship between different members of the Eurozone, Stiglitz said;
‘The single currency was supposed to be a means to an end. It has become an end in itself — one that undermines more fundamental aspects of the European project, as it spreads divisiveness rather than solidarity’.
British Pound Up after UK Claims Fell, US Dollar Supported by 2016 Rate Hike Comments
Pound Sterling (GBP) exchange rate movement on Wednesday was better than expected, thanks to forecast beating results for the UK’s July claimant count change, unemployment rate and average earnings results for June.
Claims had been forecast to rise considerably, but ended up falling, while the unemployment rate remained static at 4.9% as expected.
For the earnings field, gains were recorded both including and excluding bonuses, which resulted in Sterling appreciating notably after the results were announced.
The US Dollar was in a positive state against its rivals for most of Wednesday, having been granted support on Tuesday evening by comments from Fed official Dennis Lockhart.
In a hawkish statement, Lockhart admitted that he saw at least one Fed rate hike taking place in 2016, though he retained provisional neutrality by not naming a precise month. Domestic data from the US saw MBA mortgage applications up to August 12th dive from 7.1% to -4%.
Future EUR GBP USD Exchange Rate Forecast: Eurozone Inflation and UK Retail Sales Ahead
Euro Pound, US Dollar exchange rate movement is likely to follow the imminent French Q2 unemployment rate results, as well as the Eurozone’s June construction output and July inflation rate results; construction is expected to shift on the year from -0.8% to -0.5%, while base inflation is forecast to fall on the month but rise on the year.
For French unemployment, a fractional reduction from 10.2% to 10.1% has been forecast. In the early afternoon, the European Central Bank (ECB) monetary policy meeting accounts are due, which could give some sign as to how the central bank will act in September.
UK news will also prompt Euro Pound (EUR GBP) exchange rate movement today, with national retail sales results for July due out this morning. Expectations have been for positivity on the month, but reductions on the year.
Recent EUR, GBP, USD Exchange Rates
Before the close of Tuesday’s European session:
The Euro Pound (EUR GBP) exchange rate was trending in the region of 0.8667 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.1538.
The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.1267 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.8878.
The Pound US Dollar (GBP USD) exchange rate was trending in the region of 1.3000 and the US Dollar Pound (USD GBP) exchange rate was trending in the region of 0.7693.