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Euro US Dollar Exchange Rate Remains Poor as Fed Rate Hike Odds Increase

  • EUR USD rate falls to 1.07 – USD EUR rises to 0.93
  • Euro demand drops as PMI results upset forecasts – Fed rate hike odds limit EUR demand
  • Trio of ECB speeches incoming – US oil inventories out Wednesday

The Euro US Dollar exchange rate remained following the release of the US Markit manufacturing PMI flash for January.

Rising above expectations, the result caused some economists to see a Fed interest rate hike as incoming, which further lowered demand for the Euro due to such a policy decision usually boosting USD demand considerably.

US data to watch out for on Wednesday afternoon will consist of crude oil stock figures, which are forecast to have risen in late January. This could limit US Dollar demand, given that more oil means each barrel is worth less for US exporters.

(Last updated January 24th, 2017)

Interest in the US Dollar has returned today, following the news that President Trump will be taking an active role in rewriting US trade deals.

Eurozone PMI Disappointment Limits Euro Demand ahead of ECB Comments

The Euro US Dollar decline today has come after the announcement of Eurozone PMI flashes for January; overall services and composite results fell, though manufacturing did rise by more than expected.

Both the Eurozone and Germany saw a manufacturing windfall, though this was not enough to reverse negative opinions of Eurozone investors.

US Dollar Recovers as Trump Starts US Trade Protection with TPP Withdrawal

After a poor start to the week’s trading by the US Dollar, the USD EUR exchange rate has climbed 0.2%, following some actual firm action being taken by President Donald Trump.

Keeping to his commitments of making US trade deals more advantageous, Trump has withdrawn the US entirely from the Trans-Pacific Partnership (TPP), which the US signed up to in early 2016 but did not ratify.

It is widely forecast that the North American Free Trade Agreement (NAFTA) will be the next target on Trump’s list, but in this case, a rewriting rather than tearing up of the deal is anticipated.

Future EUR USD Forecast: ECB Officials could Signpost Incoming Eurozone Challenges

From the Eurozone, the next significant sources of input will be European Central Bank (ECB) officials, who are scheduled to speak this afternoon, this evening and early on Wednesday morning.

Remarks are due from Peter Praet, Sabine Lautenschlaeger and Daniele Nouy, which could focus on the current condition of the Eurozone economy as well as its possible future performance.

US news to watch out for today will consist of manufacturing stats as well as home sales figures for December.

In the former case, the afternoon’s Markit manufacturing PMI flash is expected to rise slightly in January, while the Richmond Fed manufacturing index has a converse dip forecast for the same month.

The afternoon’s other notable US news will be existing home sales figures for December, which are set to slow on the month.

Current EUR USD Interbank Exchange Rates

At the time of writing, the Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.07 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.93 today.