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Euro US Dollar, Euro Pound Exchange Rates Trade Tightly as Italian Banking Crisis Continues

The Euro has risen slightly against the US Dollar but fallen against the Pound today; the continuing issue has been the unstable state of Italy’s banking sector.

  • EUR USD exchange rate rises to 1.05 – EUR GBP trading dips to 0.83
  • Euro uncertainty widespread on Italian bank debts – Italian construction falls in November
  • US Dollar instability seen on Chinese concerns – Issues relate to future foreign policy
  • Pound demand rises on discussion of EU citizens in UK – Hopes remain of mutual agreement on residency issue

The US Dollar has found itself in a mixed position overall due to rising fears about the US relationship with China, while the Pound has advanced on a quiet UK data day.

Euro Exchange Rate News: Unstable EUR Performance as Italian Banks Hang in the Balance

The Euro US Dollar exchange rate has climbed marginally today, though Euro Pound trading has conversely dipped by a fractional amount.

The latest Eurozone data has come from troubled Italy, where the November construction PMI has fallen from 62.3 to 59.8.

The fate of Monte dei Paschi di Siena (MPS), Italy’s oldest bank, remains unclear, given the latest rush for a €5bn rescue fund. While not the largest bank in Italy, the historic status of MPS means that its survival is largely symbolic of how the debt-riddled Italian banking sector might fare overall.

US Dollar Investors Rattled by Trump Attitude, Pound Climbs as EU Nationals Discussed

The US Dollar has had a poor start to trading so far this week, owing to recent comments made by President-Elect Donald Trump.

Further provoking the ire of Chinese government officials, Trump has declared that;

‘I don’t know why we have to be bound by a One China policy unless we make a deal with China having to do with other things, including trade’.

This refers to the contentious situation of China and Taiwan; former US policy has been to acknowledge China as the de facto ruler of Taiwan, but not to isolate Taiwan from discussions entirely. Under Trump, this foregoing of protocol could create a large diplomatic rift with China, which has triggered the latest USD depreciation.

Pound movement against peers today has been stable so far, with GBP EUR recording a dip and GBP USD recording slight gains..

UK data is thin on the ground today, meaning that the latest source of input has come from the political sphere.

The topic has been whether EU nationals will be able to stay in the UK after Brexit, and whether the same assurances will be extended to UK citizens in EU countries.

The general consensus put forward is that if the UK assures the future of EU citizens first, it will strongly encourage EU leaders to follow suit and repay this apparent generosity in kind on the continent.

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Future EUR USD GBP Forecast: Euro Rally Possible on Tuesday’s German Sentiment Score

The Euro has the opportunity to advance strongly against the US Dollar and Pound on Tuesday morning, given the forecasts that have been made for Eurozone and Germany ZEW confidence scores.

At the time of writing, Euro-boosting rises were forecast for December’s ZEW economic sentiment indexes for both areas.

On the US side of trading, this evening is expected to bring November’s monthly budget statement, which has a shift from -44bn to -36bn forecast.

The first major UK data of the week will be Tuesday morning’s inflation rate figures for November, which are expected to show a rise on the month and the year. This news could prove problematic on Wednesday, given that unemployment is expected to rise and average earnings are due to slow.

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.

The Euro Pound (EUR GBP) exchange rate was trending in the region of 0.84 and the Pound Euro (GBP EUR) exchange rate was trending in the region of 1.18 today.

The US Dollar Pound (USD GBP) exchange rate was trending in the region of 0.79 and the Pound US Dollar (GBP USD) exchange rate was trending in the region of 1.25 today.