The Euro US Dollar (EUR USD) exchange rate held above 1.1250 on Wednesday, shifting between highs of 1.1290 and lows of 1.1252.
- Euro stable at 1.12 against USD – Losses observed due to lack of Eurozone data input
- US Dollar rises after Fed speech – Dennis Lockhart expects one 2016 interest rate hike
- US oil inventories results due today – Additional Fed speech also incoming
The Euro has slipped marginally against the US Dollar on Wednesday morning, though at the time of writing remained at a favourable exchange rate of 1.12 against the ‘Buck’.
Eurozone data is set to be severely lacking today, which has resulted in yesterday’s German and Eurozone positivity fading away overnight.
The US Dollar has reached the middle of the week on a strong footing, having risen by a small amount against the Euro (USD EUR) and 0.3% against the Australian Dollar (USD AUD). The source of this positivity has been Fed official Dennis Lockhart, who has stated hawkishly that;
‘I, as one Fed policy maker, am not prepared to rule out at least one rate hike before year’s end’.
Further US news is due this afternoon, when the US’s crude oil and gasoline inventories will be announced. Later on, Fed official James Bullard will speak and after that, the Fed will release the minutes of its July monetary policy meeting.
(Last updated August 17th, 2016)
The Euro US Dollar exchange rate was able to record substantial gains on Tuesday as USD was pressured lower across the board amid slipping confidence in the stability of the US economy.
Eurozone Economic News: Euro Gains comes as German Confidence Rises after EU Referendum
The Euro was in high demand on Tuesday, having risen by 0.7% against the Australian Dollar (EUR AUD) and the Indian Rupee (EUR INR) and 0.8% against the US Dollar (EUR USD). The greatest gain for the common currency was by 1.4% against the South African Rand (EUR ZAR).
Eurozone data published yesterday included Germany’s ZEW economic sentiment index and current conditions for August, as well as the Eurozone sentiment index and June balance of trade.
All three ZEW fields rose, as did the current Eurozone trade surplus, though Moody’s Analytics economist Anna Zabridzka was quick to point out that;
‘The improvement in confidence has been rather moderate and sentiment remains low, as the economic outlook for Europe became increasingly uncertain following the UK’s vote to leave the EU’.
US Dollar Euro (USD EUR) Exchange Rate Crashes after July’s Inflation Data Disappoints
US Dollar (USD) exchange rates dropped in response to yesterday afternoon’s July inflation rate data, which showed declines for the core and base monthly and annual fields.
Industrial production in July turned out more positively, though manufacturing production for July also fell on the year.
The US Dollar saw large losses against most of its usual rivals, with declines of -0.7% against the Euro (USD EUR) and -1% against the Swiss Franc (USD CHF) being recorded.
As with the Euro, the US Dollar did nonetheless manage to rise against the South African Rand, by 0.6%.
Future EUR USD Forecast: US Mortgages Data and FOMC Meeting Minutes in Focus
The next major data affecting the EUR USD exchange rate is likely to come from the US, given that there are only two low-impact Eurozone announcements due out today.
These minor contributions will consist of Latvia’s Q2 unemployment rate, as well as Belgium’s June trade balance result. Though the impact is expected to be minimal, Latvian unemployment is forecast to drop from 10.3% to 9.9%, while Belgium’s current trade surplus has a dip from €2041m to €1693.6m forecast.
Moving on to the major news, the afternoon will bring the US MBA mortgage applications figure for the start of August, as well as the Fed’s July minutes and a speech from Fed official James Bullard.
For the mortgages result, an extremely pessimistic drop from 7.1% to -0.40% has been forecast.
Recent EUR, USD Exchange Rates
The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.1261 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.8881 before the close of the European session.