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Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Trend within a Limited Range after US Data Produced Mixed Results

UPDATE

The Euro to US Dollar (EUR/USD) exchange rate was trending within a tight range on Thursday afternoon.

After European economic data produced mostly positive results, the single currency avoided a significant depreciation. A slight uptick can be linked to easing concerns regarding the Greek stock market after bank shares rose for the first time in three days.

The US Dollar, meanwhile, is holding a position of strength against many of its currency rivals after domestic data produced mixed results. Initial Jobless Claims came in at 270K for the week ending August 1st, bettering the market consensus of 272K claimants. However, Continuing Claims for the week ending July 25th came in at 2255K; above the market consensus of 2259K.

The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.0913.

Earlier…

Euro (EUR) Exchange Rate Trending within a Tight Range against the US Dollar (USD) despite Positive European Data

The Euro to US Dollar (EUR/USD) exchange rate was trending within a limited range on Thursday morning.

European economic data produced positive results on Thursday, which caused the single currency to edge higher versus its major peers. The appreciation has been slow, however, amid concerns regarding Greek geopolitics and the Hellenic nation’s struggle to secure some form of debt restructuring. German Factory Orders bettered estimates on both a monthly and annual basis in June. In addition, July’s German and Eurozone Retail PMIs improved upon previous figures. ‘The trend for factory orders is clearly pointing upward,’ the ministry said. ‘German industry should maintain its path of moderate growth in the coming months.’

‘If you look at the fundamentals behind the German economy, they are strong,’ said Aline Schuiling, senior economist at ABN Amro Bank. ‘We had a sharp drop in energy prices, which will support the economy, we have a weak Euro, and of course we have incredibly low interest rates.’

The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.0894.

US Dollar (USD) Exchange Rate Forecast to Hold Steady against the Common Currency (EUR) ahead of US Jobs Data

On Wednesday the US ISM Non-Manufacturing Composite for July came in at 60.3; bettering the median market forecast 56.2. This has seen the US asset hold a position of strength through to Thursday’s European session. The outcome for this positive result was increased trader confidence and a market majority, albeit a slim one, expecting the Federal Reserve to increase the cash rate in September.

Although the US economic docket is comparatively sparse today, there will be a couple of influential data publications. Initial Jobless Claims and Continuing Claims both have the potential to provoke US Dollar volatility. With the Fed keeping a close watch on data results to inform a rate decision, improvement in the labour market is essential before policy tightening can commence.

The Euro to US Dollar (EUR/USD) exchange rate dropped to a low of 1.0883 during Thursday’s European session.

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

The aforementioned US data, due for publication later on Thursday afternoon, is very likely to provoke changes for the EUR/USD exchange rate. However, the Bank of England (BoE) interest rate decision and corresponding minutes publication may also have a marked effect. If the UK central bank is seen to be particularly bullish this could stoke hawkish bets with regards to the Fed, which is widely expected to initiate a policy tightening cycle. In addition, hawkish sentiment from the BoE will weigh on the shared currency given the widening divergence between central bank policy outlooks.

The Euro to US Dollar (EUR/USD) exchange rate advanced to a high of 1.0944 today.