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Euro US Dollar Exchange Rate Stable as Eurozone Retail Sector Escapes from Contraction

The Euro has been strengthened by retail PMI stats today, enabling a small rise against the US Dollar.

  • EUR USD trading at 1.05 – USD EUR rate dips to 0.95
  • Euro boosted as retail sales soar in December – Overall Eurozone picture bright for 2017
  • US Dollar softened in Fed minute aftermath – Trio of US rate hikes expected this year
  • Euro advance expected if confidence figures match forecasts – USD losses forecast on pessimistic data predictions

The US Dollar has been weak during trading so far, potentially due to an investor overreaction to the Fed’s outlook on 2017.

EUR USD Exchange Rate Edges Up as Eurozone Retail PMI Bounces Back

The Euro US Dollar exchange rate has risen by a small amount today, thanks in part to the earlier Eurozone retail PMI for December.

While not rising by as much as expected, the rise out of contraction from 48.6 to 50.4 still proved supportive for the Euro US Dollar exchange rate.

Other Eurozone news today has included Germany posting a rising construction PMI in December, as well as Dutch annual inflation climbing during the same month.

US Dollar Euro Exchange Rate Slips despite Fed Minutes Pointing to Accelerated Rate Hike Schedule

A slight decline has been recorded in the USD EUR exchange rate today, on account of profit-taking over Wednesday night after the evening’s Fed news.

The central bank released its minutes from December’s interest rate decision meeting, which resulted in a rate hike from 0.5% to 0.75%.

The situation for 2017, however, is quite different compared to 2016, as in addition to fast-moving developments coming in the rest of the world, the US is due to welcome its 45th President, Donald Trump, on January 20th.

Trump’s economic policies have largely been responsible for a return to hawkishness for the Fed, which is expected to make three rate hikes throughout 2017. The minutes themselves highlighted this fact;

‘Most participants attributed the substantial changes in financial market conditions […] to expectations for more expansionary fiscal policies in coming years or to possible reductions in corporate tax rates’.

US Dollar bills

Future EUR USD Forecast: Euro Advantage Expected on Friday as Eurozone Confidence Stats Approach

The Euro is expected to close the week on a stronger note against the US Dollar on Friday, given how the current spread of Eurozone and US data is expected to turn out.

The last big Eurozone announcements are due on Friday morning, and are set to show a rise in business and consumer confidence, as well as services and economic sentiment in December.

One slight hurdle in front of a EUR USD rally, however, are November’s retail sales stats, which are expected to fall on the month and the year.

Over in the US, the next ecostats are due this afternoon and are expected to cover the Adp employment change and December’s ISM non-manufacturing PMI. While employment is expected to keep increasing, the incoming figure is predicted to be lower than the previous result. A drop is due to take place for the PMI printing.

High-impact US data is due at the close of the week, with Friday afternoon bringing November’s trade balance as well as December’s non-farm payrolls stats and unemployment rate posting.

Respectively, the payrolls result is due to shift downwards, while unemployment is set to remain unchanged at 4.6%.

Current Interbank Exchange Rates

The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.04 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.95 today.