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Euro US Dollar Exchange Rate Slumps after Clinton Takes US Election Debate

European Union news

  • EUR USD close to 1.11 – Losses widespread for Euro
  • Euro weakened by Deutsche Bank crisis – Could Germany’s biggest bank crash?
  • US Dollar stabilises after presidential debate – Clinton considered more persuasive than Trump

The Euro has flopped against the US Dollar in the wake of the recent debate, although this is mainly due to a rapidly escalating crisis in the Eurozone. This has been the fear over the future of Deutsche Bank, Germany’s largest commercial bank. If the bank ends up getting bailed out by the German government, a dangerous precedent may be set, while if it is allowed to financially implode, this could trigger a wave of resentment against the German government and also rock the Eurozone banking structure to its core.

In the US, the ‘Buck’ has made limited gains against its peers today, mainly having struggled to fully recover from debate-induced movements. Notably, while an apparent Clinton victory did raise the appeal of the US Dollar considerably, it was soon brought down by excessive profit-taking by investors and fell into negative ranges against most peers.

(Last updated September 27th, 2016)

While the US Dollar has also been somewhat positive against its peers so far, this could all change later on when a notable debate between the Democrat and Republican presidential candidates takes place.

Euro Exchange Rate News: Historic Highs for German Confidence Leave EUR in High Demand

The Euro has been greatly aided against most of its regular peers today, by the outcome of the German Ifo surveys for September. Against the US Dollar (EUR USD), a slight advance to 1.12 has been seen. The positivity of the German ecostats largely eclipsed the prior negativity caused by last week’s PMI printings.

While positive outcomes had been predicted anyway, the fact that the current conditions, expectations and business climate results rose above forecasts served to boost that value of the Euro considerably, resulting in positive movements against most of its peers.

The business climate figure was especially important, given that the rise from 106.3 to 109.5 was the highest figure seen in two years. Commenting on this positive news was Ifo President Clemens Fuest, who said;

‘Companies are clearly more optimistic about the months ahead. They are also more satisfied with their current business situation. The German economy is expecting a golden autumn’.

US Dollar News: Investor Uncertainty Persists as Major Election Debate Looms

The US Dollar has been an unstable option for investors of late, having climbed by 0.3% against the Australian Dollar (USD AUD) but fallen by -0.4% against the Japanese Yen (USD JPY). In other pairings, the ‘Buck’ has trended tightly, reflecting market anxieties about the upcoming televised debate between Hillary Clinton and Donald Trump.

The event is set to be a historic one, as it will see the two irregular candidates clash in their first head-to-head of the 2016 election, with the issue of who will win out in the public perception being set to decide just how the US Dollar fares in the aftermath.

Should the bombastic Trump appear to be gaining the persuasive upper hand, the US Dollar may well drop due to concerns about his economic proposals, while if Democratic candidate Clinton seems to be winning over the audience, the US Dollar is expected to stabilise and potentially even rally against its rivals.

US Dollar bills

Future EUR USD Forecast: ECB and Fed Speeches due before Historic Debate

While any near-term trading of the US Dollar is set to be influenced to some degree by the looming debate, the US currency could still be shifted by more direct economic events, specifically speeches due today from a trio of Fed officials.

Over the afternoon, Neel Kashkari, Daniel Tarullo and Robert Kaplan are all expected to give remarks, which could strengthen or undermine the case for a December interest rate hike taking place.

The Euro is also set to be shifted by central bank speeches, which will come from European Central Bank (ECB) officials.

These are due to take place over the afternoon, consisting of comments from officials Ignazio Angeloni and Benoit Coeure, as well as President Mario Draghi.

Current EUR, USD Exchange Rates

The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.1238 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.8901 today.