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Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Rally as Poor Data Eases Pressure on Fed

Euro Exchange Rates Today

The Euro to US Dollar (EUR/USD) exchange rate rallied by around 0.73% on Friday morning.

After German economic data printed positively, the single currency strengthened versus many of its most traded currency competitors. Additional appreciation can be linked to speculation that the Eurogroup meeting in Riga will see greater progress towards resolving issues in Greece.

The US Dollar, meanwhile, continues a bearish run with Wednesday’s labour market data producing disappointing results. The recent run of poor ecostats is weighing heavily on demand for the ‘Greenback’ (USD) as futures traders pare bets as to the timing of a Federal Reserve rate hike.

The Euro to  US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.0893.

Yesterday…

The Euro to US Dollar (EUR/USD) exchange rate ticked higher by around 0.35% on Thursday afternoon.

Although the majority of the European economic data publications produced poor results on Thursday, the common currency strengthened versus many of its major peers. This can be attributed to traders fearing that Wednesday’s declination was overdone with Greek problems already priced-in. Aiding the uptrend was the German Consumer Confidence index, which reached the highest level since 2001.

The US Dollar, meanwhile, is holding relatively steady versus most of its major peers as traders await labour market data due for publication later on Thursday. A recent succession of disappointing domestic data publications have weighed heavily on demand for the ‘Greenback’ (USD) as futures traders pare bets as to the timing of a Federal Reserve cash rate hike.

The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.0760.

Euro (EUR) Exchange Rate Edges Higher despite Poor Data

German Composite, Services and Manufacturing PMIs failed to meet with market consensuses on Thursday. Additionally, Eurozone Composite, Services and Manufacturing PMIs printed below the median market forecast figures.

Commenting on the Eurozone flash PMI data, Chris Williamson, Chief Economist at Markit said; ‘The weaker rate of expansion is a big disappointment, given widespread expectations that the ECB’s quantitative easing will have boosted the fledgling recovery seen at the start of the year. However, it’s too early to draw firm conclusions about whether growth is faltering again and the effectiveness of policy. Although the PMI has pulled back from March’s recent high, the index remains above the average seen in the first quarter and is indicative of the Eurozone economy growing at a reasonably robust quarterly rate of 0.4% at the start of the second quarter.’

However, a combination of positive German consumer confidence and trader fears of an overdone declination has caused the common currency to climb versus many of its major peers.

The Euro to US Dollar (EUR/USD) exchange rate has fallen to a low of 1.0665 today.

US Dollar (USD) Exchange Rate Softens on Disappointing Data

After a recent succession of disappointing domestic data results, the ‘Greenback’ softened versus many of its most traded currency competitors. The poor data results have caused futures traders to pare bets as to the timing of a Federal Reserve rate hike given that the Federal Open Market Committee (FOMC) stated that rate changes would be subject to data.

Both US Continuing Claims and Initial Jobless Claims rose more than forecast in April, aiding the US Dollar downtrend as traders speculate more delays from the Fed.

Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Fluctuate

The forthcoming US economic data is likely to cause the Euro to US Dollar (EUR/USD) exchange rate to fluctuate over the course of Thursday’s European session. Friday will see heightened movement for the pairing with US Durable Goods Orders due for publication. German economic data will also be impactful on the EUR/USD exchange rate.

The Euro to US Dollar (EUR/USD) exchange rate reached a high of 1.0756 today.