- Euro soft on lesser Eurozone data day – ECB bulletin points to rough road ahead
- US Dollar mixed as Fed rate hike bets hit another snag – Fed’s Kaplan looks to Chinese economy
- US trade balance result due tomorrow – Unemployment rate expected to remain at 4.9%
The day has been an unmemorable one for the Eurozone, where the single currency has fallen against its peers due to the results of the ECB economic bulletin. In brief, the document pointed to future growth in the single currency bloc being held back by high debt and low rates of economic activity.
The US Dollar has also been in a softened state, on account of a reversal of opinion from one of the Fed’s policymakers. Despite having advocated a September interest rate hike earlier in the week, Fed official Robert Kaplan has mentioned the worrying state of Chinese economic growth, which is linked to the odds of a Fed interest rate hike taking place.
The US will be the star of the show tomorrow, where the nation’s trade deficit is forecast to have fallen in June. More impactfully, the stagnation forecast unemployment rate and change in non-farm payrolls results for July are also expected during the afternoon.
(Last updated August 4th 2016)
The Euro has been an unstable option as the week approaches its end, having fallen by a small amount against the US Dollar and by greater amounts elsewhere.
Domestic data so far has shown a dip in the Irish services PMI for July but a more positive rise for Germany’s construction PMI for the same month.
The US Dollar has been in a desirable state recently, though the previous day’s data was ultimately mixed, with rising employment being offset by more varied results for the July PMIs.
Looking ahead, the European Central Bank economic bulletin is forecast to come out shortly, while a Fed speech is due later in the morning ahead of some US claims stats for July.
(Last updated August 3rd, 2016)
The value of the Euro has been low in most pairings recently, with the latest mixed batch of domestic data doing little to reassure investors about the stability of the single currency.
The US Dollar has been in better condition by comparison, having steadily advanced against most of its regular peers after the afternoon’s data.
Eurozone Economic News: Euro to Dollar Rate Unsettled by Unfavourable Retail Sales Figures
The appeal of the Euro to investors has taken a clear downward slant over the course of the day, with losses being seen of -0.2% against the US Dollar (EUR USD) and the South African Rand (EUR ZAR), along with -0.4% against the Canadian Dollar (EUR CAD) and the Polish Zloty (EUR PLN).
This unfavourable performance is a reflection of the morning’s wide-ranging Eurozone economic announcements; the July services and composite PMIs for the currency bloc saw gains for Germany, a decline in services for Spain and a fractional rise in the Eurozone as a whole.
In comments attached to the Eurozone-wide composite PMI, Markit Chief Economist Chris Williamson said;
‘A welcome uptick in the final PMI numbers presents a slightly better picture than the slowing signalled by the earlier flash reading, and is especially encouraging as it suggests the region saw little overall contagion from the UK’s ‘Brexit’ vote’.
However, Williamson also went on to call the rate of growth ‘modest’ and identified weakness in Spain and Italy as possible drags on the single currency bloc in the future.
Also out were the retail sales printings for June, which fell from 0.4% to 0% on the month and reprinted at 1.6% on the year.
US Dollar Creeps Up as Rising Employment Bodes Well for Friday’s NFP Data
US Dollar exchange rates have been late bloomers today, having only picked up against its currency competitors a while after US domestic data was released.
The announcement in question concerned employment in July; in a supportive development, the ADP employment change shifted from 176k to 179k. Although this is a fairly small increase, the fact that a decline to 162k was forecast has only raised the appeal of the US Dollar as a result.
In other US economic news, the finalised composite and services PMIs for the nation have respectively shown a positive reprint and better-than-expected rise from 51.2 to 51.8. Less supportively, the non-manufacturing PMI showed a decline in place of a forecast rise.
Notable exchange rate movements for the US Dollar of late have included advances of 0.3% against the Euro (USD EUR), 0.4% against the Indian Rupee (USD INR) and 0.5% against the New Zealand Dollar (USD NZD).
Future EUR USD Forecast: ECB Bulletin and US Claims Figures to Create EUR USD Volatility
Thursday is forecast to bring with it a scattering of Eurozone domestic data, along with some medium-impact US factory orders and claims results for June and July.
In the former case, notable Eurozone announcements will include the German construction PMI for July, as well as the European Central Bank’s (ECB) economic bulletin for the first week of August.
Additionally, the Eurozone retail PMI for July is due along with Greece’s unemployment rate for May.
The US jobless claims made in July are expected to fall slightly, while factory orders on the month in June have a shift from -1% to -0.7% on the cards.
Germany’s construction PMI has an increase in store, as has the Eurozone retail PMI. For Greek unemployment, a marginal improvement from 23.3% to 23% has been forecast.
Current EUR USD Exchange Rates
The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.1180 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.8948 today.