- EUR USD trades at 1.09 – USD EUR flat at 0.91
- German inflation data pulls through – Advances match with forecasts
- US Dollar slumps on consumption result – Major GDP rise fails to provide lasting support
Having not been aided by the earlier confidence rises for the Eurozone, the Euro has finally made progress against the US Dollar due to Germany’s October inflation rate figures rising in line with forecasts.
The US Dollar has fallen off across the board as trading has closed, as while the Q3 GDP growth rate result rose from 1.4% to 2.9%, personal consumption, representing consumer spending, crashed from 4.3% to 2.1%.
(Last updated October 28th, 2016)
The US Dollar has trended in a tight range against most peers in the calm before the storm ahead of this afternoon’s key GDP stats.
Euro Exchange Rate News: EUR Slips despite Forecast-Beating Confidence News
The Euro US Dollar exchange rate has traded narrowly today; this comes despite Eurozone business confidence rising in October against negative predictions and Thursday bring a double dose of good news.
Other good news that has failed to bolster the Euro has been rising services and economic sentiment during the same month. Elsewhere, Spain has seen a Q3 GDP slowdown, while France has recorded a dip on the year but rise on the month.
The biggest Euro influencer so far has been European Central Bank (ECB) official Benoit Coeure, who has warned that, while there are damaging side effects to loose monetary stimulus, the ECB could not tighten policy, as this could trap the Eurozone in a permanently-weak inflation cycle. He also commented that the bottom for negative interest rates was below the current -0.4% deposit rate, suggesting that there is further room for downward rate revisions.
US Dollar Trades Flatly ahead of Major GDP Data Release
US Dollar exchange rates have been unimpressive so far today, mainly due to a high level of tension among investors ahead of this afternoon’s US GDP data.
Previously, the US Dollar was unsettled by Thursday afternoon’s falling durable goods orders for September and conversely beneficial drop in initial jobless claims to late October.
Speaking in advance of the GDP release, Wunderlich Securities Chief Market Strategist Art Hogan said;
‘GDP is the one piece of data we’re going to keep a close eye on, and we hope it comes in as expected. We want the pattern to be that the second half [of 2016] is stronger than the first half’.
Future EUR USD Forecast: Could German Inflation Data Trigger Euro Rally Today?
One last high-impact Eurozone announcement remains today; Germany’s preliminary inflation rate results for October.
Out during the early afternoon, the results have been predicted with a small degree of optimism, with a rise from 0.7% to 0.8% expected on the year and an increase from 0.1% to 0.2% on the month. Although small in scale, such rises could well boost the Euro, as they would restore confidence in the economy of the Eurozone’s strongest member.
The major US announcement to watch out for this afternoon could well be high-impact, consisting of Q3’s quarterly GDP growth rate. As it stands, a rise from 1.4% to 2.5% is predicted; if accurate, this result might send the US Dollar on an all-around rally due to its positive implications on the chances of a December Fed interest rate hike.
Current Interbank Exchange Rates
The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.09 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.91 today.