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Euro US Dollar Exchange Rate Slides; USD Bolstered by Fed Yellen’s Comments

The Euro has fallen against the US Dollar today, in the wake of a cautious Eurozone overview from the European Central Bank’s (ECB) President.

  • EUR USD rate at 1.06 – USD EUR climbs to 0.94
  • Eurozone recovery slow but steady – ECB’s Draghi warns of future Eurozone fragility
  • US Dollar rises after Fed Yellen’s testimony – Odds of December rate hike remain high
  • Eurozone confidence set to fall next week – Possibility for hawkish Fed comments today

The US Dollar has maintained Thursday’s high levels of demand, thanks in part to still-high chances of a December Fed interest rate hike.

Euro US Dollar Exchange Rate News: ECB Head’s Uncertainty Keeps EUR Demand Low

The Euro has dipped by -0.2% against the US Dollar, in the wake of European Central Bank (ECB) President Mario Draghi’s morning speech.

While Draghi did highlight recent recoveries seen in the Eurozone economy, he also issued warnings against future complacency, weakening the Euro after stating that;

‘Even if there are many encouraging trends in the Euro area economy, the recovery remains highly reliant on a constellation of financing conditions that, in turn, depend on continued monetary support’.

High Demand for USD Boosts US Dollar Euro Exchange Rate after Hawkish Yellen Remarks

The US Dollar has been on a bull run today, rising against the Euro by healthy amounts in the wake of yesterday afternoon’s testimony from Fed Chair Janet Yellen.

Speaking to the Joint Economic Committee, Yellen all-but-assured a near-term US interest rate hike, which was widely interpreted as a signing off on a rate increase in December. The policymaker also quashed rumours that she could be forced out under a Trump administration, stating that;

‘It is fully my intention to serve out my term [to 2018]’.

Adding further resistance to the incoming President, Yellen spoke against scrapping the Dodd-Frank legislation widely criticised by President-Elect Donald Trump despite its provisions for preventing financial crashes.

All in all, Yellen’s commitment to the job has reassured investors, who are typically panicked by the possibility of a regime change at central banks.

Future EUR USD Forecast: Further Fed Comments Today could Cement USD Gains

The next major Eurozone data isn’t expected until next week, therefore contributions from the US are set to shift the EUR USD exchange rate in the meantime.

Continuing Thursday’s glut of Fed comments, this morning and afternoon will see speeches from Fed officials such as James Bullard, Esther George, Jerome Powell and Robert Kaplan.

While the odds of a December interest rate hike are high at present, further support for an increase from these officials could push the chances higher still, which would likely trigger further gains for the US Dollar against the Euro.

Looking ahead, notable Eurozone announcements will start to arrive on Tuesday, when the November EZ consumer confidence flash is due over the afternoon. This is predicted to worsen, from a prior -8 to -8.1.

Current Interbank Exchange Rates

The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.06 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.94 today.