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Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Fall if Euro Data Weakens

The Euro to US Dollar (EUR/USD) exchange rate is forecast to weaken on Thursday if key PMI and German PPI data disappoint. 

The Euro to US Dollar (EUR/USD) exchange rate was trading steadily on Wednesday due to the release of mixed economic data from both the Eurozone and United States.

Earlier in the session, the Euro found support against the US Dollar and other peers after data showed that the Eurozone’s current account surplus increased in September by a far bigger margin that forecast.

According to the European Central Bank (ECB), the Eurozone’s current account surplus jumped to a seasonally adjusted €30 billion in September, up from the €22.8 billion recorded in the preceding month.

That positive data was then countered by a separate report released by Eurostat, which showed that production in the Eurozone’s construction sector fell sharply in September. According to the data, activity in the 18-member Eurozone fell by 1.8% on a month on month basis, and tumbled by 1.7% on an annual basis.

The US Dollar softened slightly in the afternoon as housing data was mixed.

On a positive note residential construction permits issued in the USA increased to a six-year high in October, adding to signs that homebuilding in the world’s largest economy is increasing following the slowdown recorded in earlier months.

According to the Washington based Commerce Department, the number of building permits issued last month increased by 4.8% to 1.080 million units, beating economist forecasts for a rise of 0.9% to 1.040 million units.

‘Conditions in the housing market are at least stable, and on the margin they appear to be improving a bit. I think we should expect continued gradual growth heading into next year,’ said Ryan Wang, an economist at HSBC Securities USA Inc.

Any gains for the US Dollar offered by that data was quickly countered as a separate report showed that the number of US housing starts dropped by 2.8% last month to fall to 1.009 million units. Economists had been forecasting for a decline to 1.025 million.

Euro to US Dollar Exchange Rate Forecast

Economists will now be looking ahead to the evening’s publication of the minutes of the US Federal Reserve’s latest policy meeting.

Any sign that Fed policy makers are coming closer to voting in favour of increasing interest rates or hawkish rhetoric is likely to send the US Dollar climbing against the Euro and other major peers.

On Thursday, the Euro is forecast to experience volatility due to the publication of PPI data out of Germany, and a number of Markit PMI reports for the wider Eurozone. Economists will be looking for any signs that the region’s economy is improving.

Euro Exchange Rate News:

[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.2548 ,
Euro,,British Pound,0.8007 ,
Euro,,Australian Dollar,1.4541 ,
Euro,,Canadian Dollar,1.4232 ,

As of 16:30 pm GMT