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Euro Checkup: EUR USD Pairing Soars ahead of Key Catalan Meeting

The Euro has made a 0.5% gain against the US Dollar today, but could face high volatility this evening.

  • EUR USD rate rises to 1.1792 – USD EUR rate down to 0.8484
  • Euro advances on higher German trade balance – Greek production takes off
  • US Dollar slides on political holdup – Trump faces more hurdles
  • Catalonian parliament meeting in focus – Fed minutes out Wednesday

On October 9th, the Euro rose against the US Dollar from a starting rate of 1.1738 to close around 1.1742.

Euro Advances on Higher German Trading Score

A pair of supportive Eurozone ecostats have pushed the Euro up against the US Dollar today. These have come from Germany and Greece.

In the former case, Germany’s trade surplus for August has risen by more than forecast, both for the base and seasonally-adjusted measures.

In the latter, Greece has seen a sharp increase in industrial output on the year in August. From prior growth of 2.1% in July, August had a reported 5.6% increase.

US Dollar Slides on Lack of Progress for Trump Administration

With little direct economic data to refer to, US Dollar traders have instead been disappointed today by political news.

In a confidence-sapping development, Donald Trump has run into further issues while trying to actually implement reforms.

The latest setback has concerned the closing of the DACA program for young migrants and the funding of the ambitious Mexican border wall.

In an attempt to solve both issues at the same time, Trump has tried to offer a watered-down DACA closure in exchange for funding the wall.

Unfortunately, this joint proposal has met a frosty reception from House and Senate minority leaders. Because of this, it seems likely that the Trump administration will face continued struggles, on these major policy changes and others.

Euro could Crash if Catalonian President Declares Independence

Looking to future sources of Euro movement, a major one is due this evening. This will be the meeting of the Catalonian parliament, which may bring an ‘official’ declaration of regional independence by President Carles Puigdemont.

If Puigdemont does do the unprecedented then the Euro could crash, given that economists are not sure what would happen next.

Some believe that the Spanish government would implement Article 155 controls, which would effectively enable the government to take over administration of the region.

Given the violence already seen between pro-independence citizens and government-ordered police forces, such a development could trigger riots across the region’s cities.

There is a less controversial possibility, however – if Puigdemont signals an openness to discussing the matter with the Spanish government, the Euro could appreciate.

Essentially, any signs that the stability of the EU and its member nations is threatened could lead to the Euro declining, while moves towards reconciliation between Catalonia and Spain might restore trader confidence.

In the near-term, the US Dollar might be affected by Federal Reserve minutes out on Wednesday evening. The minutes could indicate whether a December interest rate hike seems likely.

If a third rate hike in 2017 seems possible, the US Dollar could advance.

Current Interbank EUR USD Exchange Rates

At the time of writing, the Euro to US Dollar (EUR USD) exchange rate was trading at 1.1792 and the US Dollar to Euro (USD EUR) exchange rate was trading at 0.8484.