The Euro has been in a position of strength against the US Dollar so far today, thanks in part to rising French business confidence.
- EUR USD up to 1.12 – Mixed movements seen elsewhere for single currency
- French business confidence up on the month – Spanish trade deficit persists
- US Dollar weakened by Fed dovishness – Odds on for December rate hike
- Eurozone confidence and ECB meeting due today – US housing data and manufacturing stats due
The US Dollar has slumped across the board in the wake of September’s Fed interest rate decision, which saw yet another rate freeze at 0.5% take place.
Euro Exchange Rate News: Losses seen after Morning’s Unsettling Eurozone Data
The Euro has been in relatively low demand against its regular peers today, although against the US Dollar (EUR USD), a sizable advance of 0.4% has been seen. Other notable positives have included 0.5% against the New Zealand Dollar (EUR NZD) and 0.6% against the Japanese Yen (EUR JPY), while a considerable loss of -0.8% has been recorded against the South African Rand (EUR ZAR).
Eurozone data out today has seen the French business confidence index for September rise, compared to the July balance of trade for Spain, which slipped from -1.4bn to -0.5bn.
Elsewhere, the European Central Bank (ECB) released its economic bulletin, which forecast slow and steady inflation but offered an overall cautious outlook on how the collective economy could fare in the future.
US Dollar Weakened by another Fed Rate Freeze
The US Dollar has slumped across the board during trading today, seeing losses of -0.3% against the Australian Dollar (USD AUD), -0.4% against the Euro (USD EUR) and -1.3% against the South African Rand (USD ZAR).
The big news of the week, the Fed’s September interest rate decision saw the central bank leave the benchmark rate on hold at 0.5% again. Given the sentiment of the accompanying statement and comments from Fed Chair Janet Yellen, economists were quick to conclude that a December rate hike would now be on the cards.
Unsurprisingly, the decision attracted objections from some, including Republican candidate Donald Trump, who accused the Fed of playing politics and making the Democrats appear better at managing the economy.
In response to this, Fed Chair Janet Yellen said;
‘We do not discuss politics at our meetings, and we do not take politics into account in our decisions’.
Future EUR USD Forecast: Euro Gains Possible if ECB’s Draghi Turns Optimistic
The next major Eurozone data to watch out for will come over the afternoon, when a pair of speeches are expected from ECB President Mario Draghi and official Sabine Lautenschlaeger.
Should Draghi make any positive comments regarding how the Eurozone could grow in the future, the Euro may well rise further against the US Dollar, though the nature of the speech means any comments are likely to be relatively brief.
For the US, the long data cycle has begun again, meaning that with a November rate hike seeming unlikely, all major US data releases will now be scrutinised for signs that they could tip the Fed over into hiking the interest rate in December.
Starting the ball rolling will be this afternoon’s positively predicted August existing home sales, as well as the Kansas Fed manufacturing activity result for September
Current EUR, USD Exchange Rates
The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.1245 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.8896 today.