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Euro to US Dollar (EUR/USD) Exchange Rate Forecast: Single Currency Weakens Today as Fed Rate Decision Approaches

Bearish US Jobless Claims Report Fails to Dent US Dollar (USD) Demand

Although the latest US Initial and Continuing Jobless Claims figures showed a larger increase in the number of unemployment benefit claims than forecast the US Dollar (USD) has continued to strengthen on Thursday afternoon. As traders’ minds turn back towards the upcoming Federal Open Market Committee (FOMC) interest rate decision the Euro to US Dollar (EUR/USD) exchange rate is expected to soften further.


Volkswagen Press Conference Weighs on Euro (EUR) Today

Sentiment towards the Euro (EUR) has generally weakened overnight, setting the Euro to US Dollar (EUR/USD) exchange rate on a downtrend. As any major Eurozone data is lacking ahead of the weekend, and Volkswagen are due to answer questions on the ongoing emissions scandal later today, pundits have been inclined to move away from the single currency. Consequently, the EUR/USD pairing was trending lower this morning in the range of 1.0978.


In spite of the odds of an imminent Fed interest rate hike seeming increasingly assured, the Euro to US Dollar (EUR/USD) exchange rate has been trending higher today, spurred by a better-than-expected German Trade Balance.

Euro Currency News: EUR Extended Gains on Improved Eurozone Growth and Global Commodity Rout

Traders have continued to buy into the Euro (EUR) this week in spite of attempts by European Central Bank (ECB) President Mario Draghi to talk the single currency down, with demand remaining high in the wake of the limited dovishness of Thursday’s ECB policy meeting. The appeal of the common currency was bolstered further yesterday by the Eurozone’s third quarter Gross Domestic Product, which showed that the economy of the currency union had experienced a slight uptick in growth on the year.

Although confidence remains high that the Federal Open Market Committee (FOMC) will vote to raise interest rates next week, the US Dollar (USD) was softened somewhat by a larger-than-expected decline in the JOLTS Job Openings figure. Domestic job vacancies slipped from 5534 to 5383, somewhat undercutting the more optimistic picture of the employment market painted by the latest Non-Farm Payrolls report. While an atmosphere of market risk aversion offered support to the ‘Greenback’ this was not enough to overcome the dominance of the Euro.

German Trade Balance Betters Forecast to Shore up the Euro (EUR) Today

Despite a significant slide from 2.6% to -1.2% in German exports, the single currency has continued to extend gains on Wednesday morning. As domestic imports also saw a sizable decrease in October the nation’s trade surplus narrowed by a lesser degree than had been anticipated, clocking in at 22.5 billion rather than 21.7 billion Euros. Offering some reassurance that the Eurozone’s powerhouse economy remains fairly resilient to persistent negative global headwinds and slowdown concerns, this has helped to boost investor demand for the common currency today.

EUR/USD Exchange Rate Forecast: Single Currency Predicted to Soften on Limited Eurozone Data

A US Dollar rally may be expected ahead of the weekend, however, as the latest Advance Retail Sales and University of Michigan Confidence Index reports are both forecast to show improvement on the month. Any gains could be limited as markets appear to have priced in the impact of an imminent Fed rate hike at this juncture, although the Euro is likely to soften somewhat on a lack of fresh stimulus over the coming days.

Current EUR, USD Exchange Rates

At time of writing, the Euro to US Dollar (EUR/USD) exchange rate was on an uptrend around 1.0935, while the US Dollar to Euro (USD/EUR) pairing remained slumped in the region of 0.9141.