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Euro to US Dollar Strength Remains despite ECB’s Voting Fears

  • EUR USD rate hits 1.06 – USD EUR pairing slips to 0.93
  • Euro demand raised by Spanish inflation – Eurozone trade balance stats incoming
  • Fed optimism fails to restore USD –  US sentiment score incoming

The Euro has remained an in-demand option against the US Dollar today, thanks to a continuing negative fallout from Wednesday’s Trump conference.

In the Eurozone, Spanish inflation has risen in December, though fears from the European Central Bank (ECB) about the year’s Eurozone elections have acted as a limiting factor. On Monday, Eurozone trade balance stats for November are due.

In the US, despite a spate of Fed officials issuing hawkish statements for 2017, the US Dollar has remained soft. The near-term will see the announcement of the University of Michigan consumer sentiment figure for January, which is expected to rise slightly on the month.

(Last updated January 3th, 2017)

The US Dollar has been an extremely poor options for investors, having slumped heavily after an unsettling press conference given by Donald Trump on Wednesday.

Euro Bounce against US Dollar Seen as ECB Bond Buying is Questioned

The Euro US Dollar exchange rate has been clearly favourable today, rising by 0.4% after the afternoon’s European Central Bank (ECB) announcement.

This covered the minutiae of Wednesday’s monetary policy meeting and notably revealed that policymakers had been split over whether to continue buying bonds, a sign that the Eurozone economy could well be on the mend.

Eurozone data saw German GDP rise in 2016, while the Government budget conversely fell over the same period. Industrial production stats for November proved highly supportive, having climbed strongly on the month and the year.

Heavy US Dollar Damage Caused after Trump Event Raises More Questions than Answers

Recent political and data developments in the US have been decidedly negative for US Dollar performance.

In the former case, Wednesday afternoon saw the pre-inauguration press conference of President Elect Donald Trump, who was frustratingly light on policy details for such a significant occasion.

Trump instead fell back on his fanciful plan to build a monumental wall between the US and Mexico, though the event as a whole was overshadowed by the publication of an unverified document that implicated Trump in deviant sexual behaviour.

Other lowlights included Trump handing off his business assets to his sons; something that raised more than a few eyebrows about the legality of such an action given the conflict of interest and associated bias.

The USD has been unable to get any relief on the data side either, with initial jobless claims in early January rising from 237k to 247k.

Future EUR USD Forecast: Further Fed Speeches due Shortly, could US Dollar Bounce Back Today?

The afternoon’s major US news, a set of four Fed speeches, is set to continue into the evening with remarks coming from officials Dennis Lockhart and James Bullard, along with an extremely early delivery by Chair Janet Yellen on Friday.

The test for these announcements will be whether potentially hawkish remarks are enough to eclipse the current disappointment present among US Dollar investors.

For the Euro, incoming major data will be Friday morning’s December inflation rate figures, which are set to rise strongly on the month and the year.

Current Interbank Exchange Rates

At the time of writing, 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 0.93 today.