The US Dollar (USD) has risen against its rivals after the Federal Open Market Committee (FOMC) statement showed that an interest rate hike can be expected in the coming months.
Greek Turmoil Dampens Euro’s (EUR) Performance, Positive German Figures may Restore Confidence in Common Currency
The Euro (EUR) has trended narrowly against most of its competitors today, seeing marginal activity against the US Dollar (EUR/USD), the Australian Dollar (EUR/AUD) and the Canadian Dollar (EUR/CAD). However, the common currency has seen major gains elsewhere, with a 0.5% gain against the New Zealand Dollar (EUR/NZD) and a 1% increase against the South African Rand (EUR/ZAR).
The Greek situation continues to hinder the Euro’s performance, with Prime Minister Alexis Tsipras stating today that he may be holding a snap election to remove dissenters from his party, unless these objectors reverse their decision to oppose the new bailout plans. The divided nature of the Greek Parliament has been headline material over the past months, and Tsipras’ announcement indicates that further tough measures are likely before any semblance of order can be restored.
However, the Euro does have positive news incoming in the form of the German Consumer Price Indices for July, which show a forecast 0.3% increase over last year’s figures, and could go some way to countering the negative factors that have affected the Euro today.
The Euro to US Dollar (EUR/USD) exchange rate has stabilised today after the negative reaction to Yanis Varoufakis’ ‘Drachma Plan’ dissipated.
Euro to US Dollar (EUR/USD) Exchange Rate Sees Stalemate Ahead of Key Data Releases and Meetings
The Euro has been trending narrowly against the US Dollar (EUR/USD) today. This is an improvement on yesterday’s figures, and it seems that the sense of shock triggered by news of a secret plan to convert the Greek currency back to the Drachma has faded away. The Euro also strengthened against the commodity currencies, seeing an over 0.2% increase against the Australian Dollar (EUR/AUD) and the New Zealand Dollar (EUR/NZD).
Most importantly for the US Dollar (USD), the Federal Open Market Committee (FOMC) is due to meet this evening, and their attitude regarding US interest rates will prove crucial for the performance of the ‘Greenback’ in the hours following the announcement. The Euro (EUR) may also be strengthened or weakened by an upcoming data release: German Unemployment Change for July, which is optimistically forecast to show a reduction of 5,000 people currently unemployed.
The Euro (EUR) has fallen across the board today, while the US Dollar (USD) exchange rate has seen mixed results.
Euro to US Dollar Exchange Rate (EUR/USD) News: Common Currency Suffers Major Decline, EUR/GBP Also Trends Lower
The Euro (EUR) has fallen against all major currencies today after it came to light that, before resigning, former Greek Finance Minister Yanis Varoufakis had created a plan to change Greece’s currency from the Euro back to the Drachma if the country was in danger of losing the common currency.
The news caused the Euro exchange rate to drop by over -1% against the Australian Dollar (EUR/AUD), the Indian Rupee (EUR/INR), the New Zealand Dollar (EUR/NZD), and the South African Rand (EUR/ZAR). The Euro also fell against the Canadian Dollar (EUR/CAD), the Pound Sterling (EUR/GBP) and the US Dollar (EUR/USD) by over -0.5%.
US Dollar to Euro (USD/EUR) Exchange Rate sees Gains for ‘Greenback’, USD Lower Against Commodity Currencies, AUD, NZD
The US Dollar (USD) has gained at the expense of the Euro’s loss, with the USD/EUR exchange rate seeing a 0.5% increase today. It has also gained on the Japanese Yen (USD/JPY) and the Polish Zloty (USD/PLN) by over 0.4%.
As with the Euro, the US Dollar has fallen against the Australian Dollar (USD/AUD) and the South African Rand (USD/ZAR) today, although by less than -0.5% which is a relatively small loss compared to the declines recorded by other currencies. This is due to the hopes that the Chinese stock market will receive some much-needed stability through governmental intervention, which may lead to an increased demand for Australian and South African mining exports in the future.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast: Euro Setback may Diminish in Near Future
While the Euro (EUR) is currently on a downtrend after the exposure of the ‘Drachma Plan’, it is possible that the negative reaction to the news will only be yet another bump on the long road to Greece’s economic recovery. Bailout talks are continuing, and before the plan was revealed, the Euro was actually enjoying an uptrend against all major rivals, which shows that it is entirely possible for the common currency to bounce back in the next few days.
However, when compared to the US Dollar (USD), the Euro exchange rate (EUR/USD) seems unfavourable, as the US is set to publish a number of key data releases in the next few days which could push the ‘Greenback’ higher in its advantage against the Euro.
Current EUR, USD Exchange Rates
The Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1030 and the US Dollar to Euro (USD/EUR) exchange rate was trending in the region of 0.9069 today.