The Euro to US Dollar (EUR/USD) exchange rate was trending within a limited range on Thursday afternoon.
After producing mostly positive domestic data results on Thursday, the common currency advanced versus most of its competitors. The appreciation has been somewhat sluggish, however, as fears regarding geopolitics in Greece weigh on investor confidence.
The US Dollar, meanwhile, gradually edged higher versus many of its rivals as a result of positive labour market data. The appreciation has been sluggish with previously disappointing domestic data results still weighing on bets as to the timing of a Federal Reserve liftoff.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1260.
Euro (EUR) Exchange Rate Forecast to Strengthen versus the (USD) despite Looming Greek Deadlines
Despite the fact that the geopolitical upheaval in Greece is far from resolution, the shared currency advanced. This is thanks to mostly positive domestic data results. However, with Greece due to make a massive International Monetary Fund (IMF) payment on Friday, and with the window for securing bailout funds rapidly closing, there is a high potential that the Euro gains will be short-lived.
European data produced mostly positive results on Thursday morning, which prompted the Euro climb. The Eurozone Retail PMI rose from 49.5 to 51.4 in May while the German Retail PMI advanced from 52.6 to 55.8 in May. However, May’s German Construction PMI dropped to a four-month low of 50.8.
Commenting on the Markit Germany Construction PMI survey data, Oliver Kolodseike, economist at Markit said: ‘Output growth in Germany’s construction sector was maintained in May, according to the latest set of PMI results. However, the pace of expansion was only marginal overall, as companies reported a sharp drop in civil engineering activity. Nevertheless, companies reported that a low interest rate environment helped secure new business, thereby supporting the view that output growth is likely to be maintained in the near-term.’
The Euro to US Dollar (EUR/USD) exchange rate has fallen to a low of 1.1228 today.
US Dollar (USD) Exchange Rate Forecast to Soften versus the Single Currency on Pared Fed Bets
After a recent succession of less-than-ideal domestic data results, the US Dollar softened versus its major peers. The evidence points towards lacklustre second-quarter growth which has caused futures traders to pare bets as to the timing of a Federal Reserve rate hike. Many analysts have now delayed a liftoff until 2016, a feeling shared by some Fed policymakers.
US labour market data produced positive results but it hasn’t been enough to see the US Dollar make a significant recovery. However, many are confident that the robust labour market improvement of late points towards positive economic recovery. ‘In May, we continue to see mixed economic data,’ Yong Yang, senior economist at Dearborn, Michigan-based Ford, said on a June 2 revenue call. ‘Nonetheless, labour market improvement remains robust. Overall, we believe that the underlying fundamentals supporting growth in 2015 remain in place.’
Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Fluctuate on Geopolitics and US Data
With positive US data results, and with geopolitical tensions in Europe causing single currency volatility, the Euro to US Dollar (EUR/USD) exchange rate is likely to fluctuate over the remainder of Thursday’s European session.
Friday will be of significance for the EUR/USD pairing. The Eurozone Gross Domestic Product and US Change in Non-Farm Payrolls and Unemployment Rate will be very likely to provoke volatility.
The Euro to US Dollar (EUR/USD) exchange rate advanced to a high of 1.1380 today.