The Euro (EUR) has fallen by -0.3% against the US Dollar (EUR/USD) today, something attributed to the rise in confidence for the US Dollar (USD) thanks to a speech by Federal Reserve Bank of Atlanta President Dennis Lockhart yesterday.
Eurozone Consumer Confidence could Boost Common Currency (EUR) if Predictions are Proven Wrong
The hawkish nature of Lockhart’s speech in Georgia yesterday may be repeated tonight in a speech in Alabama, although if Lockhart reiterates the same basic message as before, it is possible that the net effect on the EUR/USD exchange rate will be minimalized due to repetition.
For the Euro (EUR), the Eurozone Consumer Confidence score for September is imminent, and while predictions have been for a drop from -6.9 points to -7, anything that posts in the positive (however potentially unlikely) could strengthen the single currency considerably.
The Euro (EUR) has dropped by -1% against the US Dollar (EUR/USD) today, a substantially worse result than earlier on.
Eurozone Confidence Score has little Positive in Store for Common Currency Tomorrow
The Euro’s (EUR) loss against the US Dollar (EUR/USD) can only be attributed to grave warnings made against the European Central Bank (ECB) by the Chief Economist of the Bank of Italy, Eugenio Gaiotti. Gaiotti stated that ‘We assess that downside risks for medium-term growth and inflation have increased’, and that ‘Monetary policy cannot permanently guarantee strong and lasting growth, but the weakening global economy calls for a decisively supportive monetary stance’. The reason that the Euro’s decline can only be attributed to this because the US Existing Home Sales figures have both declined in percentage and monetary terms.
Tomorrow, the US House Price Index will come out an hour before the Eurozone Consumer Confidence score for September; predictions for both outcomes can only be considered as pessimistic.
A lack of definite movement has been seen in the Euro to US Dollar (EUR/USD) exchange rate this morning, as the common currency (EUR) has been balanced by mixed domestic news while the ‘Greenback’ (USD) continues to reel from last week’s dovish attitude over US interest rates.
EUR/USD Exchange Rate News: 2nd 2015 Greek Election brings Stability; German Producer Prices Decline Today
The Euro (EUR) has trended in a narrow range against the US Dollar (EUR/USD) today and neither currency has excelled itself against other rivals either. The single currency’s greatest gains today have been by 0.6% against the Australian Dollar (EUR/AUD), 0.8% against the South African Rand (EUR/ZAR) and 1% against the New Zealand Dollar (ERU/NZD), while significant losses of -0.3% against the Swiss Franc (EUR/CHF) and -0.4% against the Polish Zloty (EUR/PLN) and the Indian Rupee (EUR/INR) have been recorded.
As the only Eurozone economic publication of the day has been the declining German monthly and yearly Producer Prices for August, the biggest influencer elsewhere has been the outcome of the second Greek election of 2015. Former Prime Minister Alexis Tsipras has won again, although the majority of the vote achieved by the Syriza party was dampened somewhat by the news that over 40% of the Greek public hadn’t voted at all.
More supportive news was the fact that during July and August, Euros have been flowing back into Greece for the first time since September last year. This reversal of the previous negative outflow can only be considered as positive and the hard-fought stability within the Greek parliament is expected to have an amplifying effect on the flow of money back into the country in the future.
US Dollar (USD) Reeling from Fed Interest Rate Decision, Exchange Rates Suffer Accordingly
The US Dollar (USD) has risen by 0.3% against the Australian Dollar (USD/AUD) and the South African Rand (USD/ZAR) today and has seen a greater 0.8% advance against the New Zealand Dollar (USD/NZD). However, the ‘Buck’ has also posted notable losses of -0.2% against the Swiss Franc (USD/CHF), -0.3% against the Indian Rupee (USD/INR) and -0.4% against the Polish Zloty (USD/PLN). Against the Euro (USD/EUR), a narrow trending has been observed.
No US economic releases of note have been seen yet this week, so the cause of this lacklustre showing is likely to be due to ongoing discontent over the Federal Open Market Committee’s (FOMC) decision last week to leave US interest rates at 0.25%. Fed Bank of Richmond President Jeffrey Lacker continued to be the sole voice for a rate hike over the weekend, stating that; ‘US economic conditions have improved quite significantly over the last six years, all things considered. It’s time to recognize the substantial progress that has been achieved and align rates accordingly’.
EUR/USD Exchange Rate Forecast: US Domestic Housing Data to Decide Pairing Movement in Near Future
Today is the start of a relatively quiet data week for both currencies. The largest amount of Eurozone results come on Wednesday, while the US majority share will come on Thursday. Ahead of that, the US Existing Home Sales for August (out today) and the US Housing Price Index for July (out tomorrow) will be the most likely factors to trigger a EUR/USD exchange rate shift. A -1.6% drop has been predicted for the former, while the latter has a 0.4% rise on the cards. The Eurozone Consumer Confidence Index will also be of interest tomorrow.
Current EUR, USD Exchange Rates
The Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1285 and the US Dollar to Euro (USD/EUR) exchange rate was trending in the region of 0.8863 today.