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Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Soften after Positive US Data

Euro Exchange Rates Today

The Euro to US Dollar (EUR/USD) exchange rate dived by around -1.51% on Tuesday afternoon.

Despite the fact that several reports suggested that the European Commission had offered a deal to the Greeks which would see relaxed austerity measures, the shared currency dived versus the majority of its most traded currency rivals. This is due to the fact that the reports have not been confirmed by either side, and that the German’s are very unlikely to back such a deal anyway. Oiling the slide was a particularly disappointing result from the German ZEW Survey for Economic Sentiment.

The US Dollar, meanwhile, strengthened versus most of its major peers on Tuesday. The appreciation can be linked to better-than-expected domestic data, with Housing Starts reaching a fresh 7-year high.

The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1150.

Euro (EUR) Exchange Rate Forecast to Dive Versus the Pound on Geopolitical Tension

With Greek officials stating that the country will run out of money by the end of the month, the need to secure a deal to unlock bailout funds is greater than ever. Of paramount importance is the timing, which is the main concern for traders. Although some Greek officials believe that they are very close to unlocking funds, the potential barriers of the European Commission and Germany are weighing on demand for the common currency.

Aiding the single currency depreciation was a particularly disappointing data release out of the currency bloc’s most influential nation. The German ZEW Survey for Economic Sentiment was expected to drop from 53.3 to 49.0, but it actually declined to 41.9. This has added to fears of a slowdown in the Eurozone’s most powerful country after recent growth data failed to impress.

The Euro to US Dollar (EUR/USD) exchange rate has fallen to a low of 1.1158 today.

US Dollar (USD) Exchange Rate Forecast to Strengthen Versus the Euro on Housing Data

Although US data printed disappointingly on Monday, the ‘Greenback’ (USD) advanced versus the majority of its most traded currency competitors on Tuesday thanks to positive domestic data.

April’s Building Permits climbed by 10.1% in April; eclipsing the median market forecast figure of 2.1%.  Housing Starts reached a 7-year high in April on the month having advanced by 20.2%; bettering the market consensus of 9.6% growth.

‘Homebuilding is finally finding its rhythm,’ Ryan Sweet, senior economist said before the report. ‘With the job market tightening, wages showing subtle signs of improvement, and borrowing costs at historical lows, we should see a solid pickup in the second half.’

‘Given the acceleration in US housing demand in the early stage of the spring selling season, our expectations are that the strengthening of demand is sustainable and should drive better new home sales for all of 2015,’ Chief Executive Officer Richard Dugas said on an earnings conference call on April 23.

Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Hold Losses on Geopolitical Turmoil

With Greece increasingly likely to leave the Eurozone due to the nation’s refusal to cross electoral red lines, and with poor German data weighing on demand, the Euro to US Dollar (EUR/USD) exchange rate is likely to hold losses for the remainder of the European session. Even if US data was to print poorly, the large gap between the Euro and the US Dollar is unlikely to be recovered.

Wednesday could see further EUR/USD volatility with several data publications pertaining to both Europe and the US due for release.

The Euro to US Dollar (EUR/USD) exchange rate advanced to a high of 1.1326 today.