The Euro to US Dollar (EUR/USD) exchange rate softened by around -0.44% on Friday morning.
Although Greece has been given an emergency loan by the European Central Bank (ECB), trader risk –appetite has cooled significantly. This is due to Athens having their latest reform proposal rejected, once again, by creditors. Greece now has a deadline of only six working days in order to edit their reforms in order to please all parties involved.
The US Dollar, conversely, strengthened versus most of its major peers thanks to damp market sentiment. Additional ‘Greenback’ (USD) appreciation can be attributed to the hangover from Thursday’s positive labour market data results.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.0618.
Yesterday…
The Euro to US Dollar (EUR/USD) exchange rate edged lower by around -0.12% on Thursday afternoon.
With divided opinion as to whether Greece will manage to make the promised debt repayment to the International Monetary Fund (IMF), the shared currency is holding relatively steady versus many of its major peers. A slight appreciation can be linked to a better-than-expected German trade surplus.
The US Dollar, meanwhile, edged higher versus most of its major peers after minutes from the Federal Open Market Committee (FOMC) showed some policymakers opted for a rate hike in June. The appreciation has been fractional, however, considering that the meeting was held prior to recent disappointing data results.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.0771.
Euro (EUR) Exchange Rate Holding Steady ahead of Greek IMF Repayment
With traders eagerly awaiting news as to whether Greece will meet with its obligation of repaying the €450 million instalment to the IMF, the shared currency is generally seeing little by way of volatility.
Greek Finance Minister Yanis Varoufakis has stated that they will pay the IMF on time. An unnamed Greek government official has also told Reuters that Athens will repay with the debt today, stating; ‘The payment has been scheduled and will go out later today.’ Should the debt be repaid as expected, the shared currency is likely to appreciate as it would show Greece’s willingness to stay as part of the Eurozone.
German Trade Balance data printed positively on Thursday which has provoked a Euro appreciation, albeit fractional.
The Euro to US Dollar (EUR/USD) exchange rate dropped to a low today of 0.7278.
US Dollar (USD) Exchange Rate Edges Higher on Split Fed
As explained above, the FOMC minutes revealed that some of the policymakers had dissented from Federal Reserve Chair Janet Yellen’s opinion to hold rates in June. However, the minutes showed that the reasoning behind some policymaker’s decision to hike rates at this early stage was due to positive data results. The meeting came before the disappointing Non-Farm Payrolls data amongst a string of other negative results from domestic data.
US labour market data, due for publication later on Thursday, will be closely scrutinised by rate hawks who will want to see positive results to back-up claims made by the hawkish policymakers.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Fluctuate
With US labour market data due, and with Greece yet to repay the first instalment to the IMF, there is a high likelihood that the Euro to US Dollar (EUR/USD) exchange rate will fluctuate over the course of Thursday’s European session.
Friday should see the EUR/USD exchange rate dictated by geopolitics and market sentiment given the lack of influential data pertaining to either Europe or the US to provoke volatility.
The Euro to US Dollar (EUR/USD) exchange rate advanced to a high of 1.0790 today.
