The Euro to US Dollar (EUR/USD) exchange rate strengthened by around 0.99% on Friday afternoon.
Euro (EUR) Exchange Rate Forecast to Strengthen against the ‘Greenback’ (USD) as Tsipras Urges Syriza to Accept Proposals
After Greece submitted a fresh reform proposal to Eurozone officials in the hope of unlocking financial aid, the shared currency strengthened versus many of its peers. The proposals put forward by Tsipras may prove to be controversial back home however, given that the austerity measures he plans to implement are harsher than those the Greek people voted to reject. Tsipras is also likely to face hurdles with hardened-left Syriza back-benchers. And there is still the small matter of convincing Germany, a difficult job when you consider the sore point of debt relief which has divided the two nations.
European affairs minister Harlem Desir told Radio Classique this morning that: ‘It is a very significant moment for Greece, but also for Europe. The proposals which have been put forward are all serious, credible, and comprehensive.’
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1168.
US Dollar (USD) Exchange Rate Forecast to Soften against the Shared Currency (EUR) on Improving Market Sentiment
Despite the facts that US data has been mixed over the past week and Federal Open Market Committee (FOMC) minutes from the most recent meeting were vague and dovish, the US Dollar strengthened versus most of its major peers. The appreciation was the result of damp market sentiment as the situation in Greece weighed on investor confidence. In addition, traders flocked to safe-haven assets after China’s stock market looked set to crash spectacularly.
Friday has seen the US Dollar decline versus most of its rivals, however. This is due to easing fears regarding both Greece and China’s stock market. Speculation that the Federal Reserve will look to hold the cash rate into 2016 has also caused the ‘Greenback’ to soften versus its most traded currency peers.
The Euro to US Dollar (EUR/USD) exchange rate dropped to a low of 1.1052 today.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Trend Higher Irrespective of US Data Results
Although there are several US data publications due for release later on Friday, trader risk-appetite is likely to drive the market. Therefore, the Euro to US Dollar (EUR/USD) exchange rate is likely to continue trending higher over the course of Friday’s European session. With that being said, there is the potential for the Euro to soften if a Eurozone official is seen to reject the Greek proposal or if Syriza members turn on Tsipras.
The Euro to US Dollar (EUR/USD) exchange rate climbed to a high of 1.1134 today.
