EUR/USD Conversion Rate Predicted to Trend Statically despite Positive European Data
The Euro to US Dollar (EUR/USD) exchange rate was trending within a limited range on Tuesday morning.
Despite the fact that European economic data produced mostly positive results on Tuesday, the shared currency is holding a weak position versus its currency rivals. The absence of appreciation in the face of positive ecostats can be attributed to ongoing concern that the European Central Bank (ECB) will amplify stimulus measures in December. These fears continue to mount despite yesterday’s assertions from ECB Executive Board Member Sabine Lautenschlaeger, who stated that European data points towards recovery and the bank should give the current program of stimulus a longer period of assessment. ‘Data in the last few weeks indicates that the Euro-area economy has so far shown itself to be resistant to uncertainty in the global economy,’ Lautenschlaeger said in a speech in Munich on Monday. ‘For me it is clear: At this time, I see no need for further monetary-policy measures, especially not for an expansion of the asset-purchase program.’
Lautenschlaeger’s view of European economic progress will have been bolstered today following positive European data. German third-quarter Gross Domestic Product met with median market estimates whilst November’s German IFO Business Climate, Current Assessment and Expectations all bettered the respective market consensuses.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.0646.
USD/EUR Conversion Rate Movement Predicted on US Consumption Data
Although US data produced disappointing results yesterday the ‘Greenback’ (USD) advanced versus its currency rivals. This is mainly due to the improved likelihood of the Federal Reserve hiking the overnight cash rate in December. US Dollar gains have been minimal of late, however, amid concern that overvaluation could become a major drag on economic progress. What’s more, if the US asset becomes significantly overvalued the Fed may wish to delay a cash rate increase through fear of a US Dollar surge in the immediate aftermath.
Later today there will be a number of influential domestic ecostats with the potential to provoke significant US Dollar volatility. The second estimate for third-quarter Annualised Gross Domestic Product is forecast to advance by 2.1%. The second estimate for third-quarter Personal Consumption Expenditure is predicted to hold at 3.1%, whilst third-quarter Core Personal Consumption Expenditure is predicted to hold at 1.3% on the quarter. Additionally, as the North American session progresses, US Consumer Confidence will be of significance.
The Euro to US Dollar (EUR/USD) exchange rate dropped to a low of 1.0619 today.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast: EUR/USD to Hold Steady ahead of US Data
Given the likelihood that the forthcoming US economic data, as described above, will provoke significant ‘Greenback’ volatility, the Euro to US Dollar (EUR/USD) exchange rate is likely to hold steady ahead of the publications. Later during the North American session the EUR/USD conversion rate is likely to see movement in response to November’s US Consumer Confidence which is predicted to rise from 97.6 to 99.5.
Wednesday is also likely to see significant EUR/USD volatility despite a lack of European data, with only German Import Price Index data of any note. This is because US Durable Goods Orders and annual Core Personal Consumption Expenditure will be highly impactful.
The Euro to US Dollar (EUR/USD) exchange rate climbed to a high of 1.0670 during Tuesday’s European session.