Euro to US Dollar (EUR/USD) Exchange Rate Down over 1%
The Euro to US Dollar (EUR/USD) exchange rate fell to a low of 1.1575 on Thursday after the European Court of Justice sanctioned the European Central Bank’s plans to roll out quantitative easing measures.
The Euro to Pound Sterling (EUR/GBP) exchange rate also declined, shedding over 0.6% to trend in the region of 0.7689.
Germany’s as-forecast growth figure for 2014 did nothing to halt the Euro’s downtrend, but better-than-expected trade balance stats for the currency bloc could lend the Euro some support in the hours ahead.
EUR/USD Exchange Rate Slightly Stronger
A shockingly steep decline in US retail sales saw the EUR/USD exchange rate recorded a very modest gain on Wednesday.
While the pairing climbed by as much as 0.4% in the immediate aftermath of the data publication, the Euro gave up gains against the US Dollar amid bets that the Federal Reserve won’t be deterred from increasing interest rates.
Towards the close of the European session the Euro to US Dollar (EUR/USD) exchange rate was trading in the region of 1.1793.
EUR/USD Exchange Rate Fluctuates on Stimulus Comments
The Euro to US Dollar (EUR/USD) exchange rate fell by -0.4% on Wednesday as European Central Bank (ECB) President Mario Draghi asserted that the central bank is prepared to introduce quantitative easing measures.
Stimulus speculation has been weighing heavily on the Euro in recent months, and this sign that the central bank will indeed take action at next week’s meeting drove the common currency lower.
The ECB President asserted; ‘All members of the Governing Council of the ECB are determined to fulfill our mandate. Naturally, there are of course differences over how that should be done, but there aren’t endless possibilities.’
The Euro to US Dollar (EUR/USD) exchange rate was trading in the region of 1.1744
EUR/USD Exchange Rate Extends Declines
The Euro to US Dollar (EUR/USD) exchange rate extended declines as trading continued, taking the pairing’s daily loss to 0.4%.
The US Dollar enjoyed additional support as the US NFIB Small Business Optimism index printed at an eight-year high of 100.4 in December, up from 98.1 in November and beating expectations for a reading of 98.5.
According to NFIB economist William Dunkelberg; ‘This is probably why the gross domestic product numbers have been looking better because the small business sector has actually started to contribute to growth. The small business sector, which is estimated to account for about half of the country’s overall GDP, added to upbeat employment data in painting a bullish picture of the economy even as dark clouds settle over the global economy.’
US JOLTS job openings data also surprised to the upside, advancing from a negatively revised 4830 to 4972 in November.
The Euro to Pound Sterling (EUR/GBP) exchange rate also declined on Tuesday, with the pairing shedding 0.45% over the course of the European session.
Tomorrow’s Industrial Production figures for the Eurozone (scheduled for release at 08:30 GMT) could have an impact on the EUR/USD exchange rate. Of course, investors will also be paying close attention to the US Advance Retail Sales figure.
A month-on-month sales dip of -0.1% has been projected for December, but if the report should print even lower the US Dollar could come under pressure during the North American session.
The Euro to US Dollar (EUR/USD) exchange rate shed 0.2% as the European session got underway on Tuesday.
Euro to US Dollar (EUR/USD) Exchange Rate Softens on Interest Rate Remarks
The Euro to US Dollar (EUR/USD) exchange rate was trading in the region of 1.1808 as the US Dollar was supported by comments issued by Federal Reserve of Atlanta President Dennis Lockhart.
As well as asserting that the US economy is performing well, Lockhart stated that the Federal Reserve should look to increase borrowing costs by the middle of 2015 – even if domestic inflation doesn’t pick up.
Lockhart stated; ‘We are going to conceivably have to make a judgment that the outlook, even in the absence of real-time inflation readings that are rising, that inflation is nonetheless converging to target […] Wages are a swing factor going forward [the Fed] will either be informed by some positive indicators or the absence of negative indicators. But I would really expect that over the next half year to three quarters of a year we would expect to see some pickup in wage data. There is a lot of noise in the wage data. It is going to take a few more months.’
The Euro to US Dollar (EUR/USD) exchange rate achieved a high of 1.1860
The downtrend in the Euro to US Dollar (EUR/USD) exchange rate was exacerbated by Germany’s Wholesale Price Index.
After registering a month-on-month figure of -0.7% in November, the WPI fell by -0.1% in December.
On the year the WPI was down -2.3%.
According to RTT News; ‘
‘Germany’s wholesale prices decline accelerated for the second straight month in December and prices fell the most in five years during the whole year 2014, preliminary figures from Destatis showed Tuesday. […] On a monthly basis, wholesale prices fell 1.0% during December, which was faster than a 0.7% fall in the prior month. It was the third consecutive monthly decrease. The wholesale prices decreased an average 1.2% in 2014 compared to the previous year. It was the biggest decline since 2009, when prices fell 6.5%, the agency said.’
The Euro to US Dollar (EUR/USD) exchange rate fell to a low of 1.1804
Euro to US Dollar (EUR/USD) Exchange Rate Forecast
The Euro to US Dollar (EUR/USD) exchange rate could experience movement later today as the US publishes its NFIB Small Business Optimism report, JOLTS Job Openings figures and Monthly Budget Statement.
Federal Reserve Bank of Minneapolis Narayana Kocherlakota is also due to comment on the US economic outlook later today in New York.
Hawkish comments would be US Dollar supportive while dovish comments could see the Euro to US Dollar (EUR/USD) exchange rate pare declines.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1808
The US Dollar to Euro (USD/EUR) exchange rate is currently trending in the region of 0.8466
The Euro to Pound Sterling (EUR/GBP) exchange rate is currently trending in the region of 0.7810
The Pound Sterling to Euro (GBP/EUR) exchange rate is currently trending in the region of 1.2801