US Durable Goods Orders Bettered Expectations to Boost ‘Greenback’ (USD) and Odds of 2015 Fed Rate Hike
Although yesterday’s raft of US data was not universally positive the US Dollar (USD) was nevertheless bolstered by revelation that October Durable Goods Orders had leapt from -0.8% to 3.0%. As the odds of the Federal Open Market Committee (FOMC) voting to raise interest rates in December are seemingly undamaged the ‘Greenback’ has remained on bullish form overnight, with the EUR/USD exchange rate likely to hold its present downtrend over the coming day.
As the US Dollar (USD) strengthens today in anticipation of a stronger October Durable Goods Orders report, the EUR/USD exchange rate has been trending lower, with the Euro (EUR) weakened by fears of fresh violence in Greece.
Improved German Business Sentiment Bolstered Euro (EUR), US Dollar (USD) Bearish after Disappointing November Consumer Confidence
Despite the finalised third quarter German Gross Domestic Product report having confirmed disappointing growth of 0.3% on the quarter, demonstrating that both exports and investment had decreased, sentiment towards the Euro (EUR) remained largely positive on Tuesday. Safe-haven demand was largely bolstered by the news of a Russian fighter shot down by Turkish forces over Syria, with rising geopolitical tensions provoking greater caution from investors. Also of benefit to the single currency was the November German IFO Business Sentiment Survey, which proved decidedly more bullish than anticipated. Business confidence within the Eurozone’s powerhouse economy was shown to have grown on the month, suggesting that the impact of the ongoing Volkswagen emission scandal remains less severe than initially feared.
Although the latest US GDP figure demonstrated continued strength in the world’s largest economy it was not quite bullish enough to overshadow a downturn in Personal Consumption. Consumer spending in the third quarter was shown to have slipped back from 3.2% to 3.0%, a discouraging result as the November Consumer Confidence figure unexpectedly slumped from 99.1 to 90.4. While the ‘Greenback’ (USD) was prompted into a downtrend as a result of this unimpressive data, the odds of an imminent Fed rate move were nevertheless unchanged.
US Dollar (USD) Trending Higher Today, US Durable Goods Orders Forecast to Strengthen
Fresh US Dollar strength is expected this afternoon, however, with a raft of economic data due for release, including Personal Consumption Expenditure Core, Durable Goods Orders, Jobless Claims data and the November Services PMI. With stronger showings widely expected, there is likely to be fresh incentive to buy into the ‘Buck’ ahead of December’s Federal Open Market Committee (FOMC) policy meeting, as any negative figures are unlikely to be sufficiently dovish to deter policymakers intent on near-term monetary tightening.
Meanwhile, the Euro slumped across the board on Wednesday morning as the political situation in Greece remains a concern following the first major bomb attack in Athens since Prime Minister Alexis Tsipras was elected at the beginning of the year. With the prospect of increased violence the outlook of the Hellenic nation is once again uncertain.
EUR/USD Exchange Rate Forecast: Common Currency to Soften as German Consumer Confidence Expected to Decline
Tomorrow’s German GfK Consumer Confidence Survey is forecast to show a slight decline in domestic optimism, to potentially deal a further blow to the appeal of the Euro and the outlook of the Eurozone’s wider economy. As US markets will be closed for Thanksgiving on Thursday the EUR/USD exchange rate is expected to experience more limited movement, particularly if the ‘Greenback’ shows further signs of strength today.
Current EUR, USD Exchange Rates
At time of writing, the Euro to US Dollar (EUR/USD) exchange rate was on a downtrend in the region of 1.0596, while the US Dollar to Euro (USD/EUR) pairing made bullish gains in the range of 0.9436.