The Euro to US Dollar exchange rate was poor yesterday thanks to US Dollar strength; today could bring further losses on consumer confidence data.
- EUR USD closed at 1.09 yesterday – USD EUR rose to 0.91
- Euro briefly spiked on Draghi comments – ECB interest rate still at 0%
- US Dollar climbed on Fed comments – Trump’s debate weakness also aided USD
- Euro US Dollar exchange rate forecast – Eurozone confidence flash and Fed speech due today
On the whole, the US Dollar stayed in high demand yesterday, thanks to a support from the Fed and the US presidential election debate. By comparison, today’s US data will be extremely limited and potentially low-impact.
Euro Exchange Rate News: ECB’s Draghi Inspired Short-Term Volatility on QE Comments
The Euro was mixed against most of its peers on Thursday, though EUR USD exchange rates were consistently poor due to the latter’s strength.
One notable exception was when, during a European Central Bank (ECB) press conference, ECB President Mario Draghi stated that QE would not be extended.
This resulted in the Euro spiking against the US Dollar for a short period, jumping from 1.09 to 1.10 before tumbling back down soon afterwards.
Concerns had previously been that due to the ECB’s vigorous quantitative easing program, available bonds to buy were running out, though Draghi’s speech largely dispelled these fears.
In other news, the ECB left interest rates at 0% for another month, which was a largely predicted outcome.
US Dollar Gains Triggered by Surprise Fed Hawkishness, Clinton Debate Success
Thursday’s movements for the US Dollar were essentially positive from start to finish, though as the Euro spiked up during the afternoon, a brief, dip was recorded for the USD EUR exchange rate.
On the economic front, the US Dollar was supported by unusually transparent comments from Fed official William Dudley, who stated that if US economic conditions remained stable, a rate hike was likely ‘later this year’. Dudley also said that;
‘We have made quite good progress towards our objectives…so clearly as we get closer to our objectives it’s likely that we’d want to make monetary policy somewhat less accommodative’.
Additional support for the US Dollar exchange rate came from the last US Presidential Election debate in Las Vegas, where Hillary Clinton was generally considered the winner.
Among the usual Trump theatrics, the most shocking moment was when the businessman refused to confirm that he would accept the outcome of the election; Trump has previously claimed that the election is being rigged for a Democrat victory.
Future EUR USD Forecast: Further Losses Possible for Euro on Confidence Flash
While the Eurozone will release more data than the US today, this might not necessarily work in the Euro’s favour.
The morning will see an announcement from Bundesbank President Jens Weidmann, while in the afternoon, October’s consumer confidence flash is set to fall from -8.2 points to -8.6.
From the US, the only news due will be this afternoon’s comments from Fed official Daniel Tarullo. Tarullo is not expected to generate much impact, as his topic is ‘Pedagogy and Scholarship in a Post-Crisis World’.
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.