Prior to the Easter weekend, the Euro to US Dollar (EUR/USD) exchange rate rallied after Greece submitted a new reform proposal to creditors.
The situation between Greece and the Eurozone has been rife with inconsistencies, arguments and general difficulties. Such was the impact of the potential for a Greek exit from the Eurozone that the situation completely overshadowed data publications.
Conversely, data results have been the driving force behind US Dollar movement. This is as a result of the Federal Reserve stating that data will dictate the timing of a benchmark rate increase.
Euro (EUR) Exchange Rate Forecast to Fluctuate
Until more is known about the acceptability of the Greek proposal, the Euro is unlikely to sustain any significant gains. However, should fears of a Grexit ease; data ought to have a greater impact on single currency movement. There will be several influential data publications over the course of the coming week.
The most significant of these domestic data publications are as follows; Eurozone Investor Confidence, German Factory Orders, German Construction PMI, German Retail PMI, Eurozone Retail PMI, Eurozone Retail Sales, German Industrial Production and German Trade Balance.
US Dollar (USD) Exchange Rate Forecast to Soften
Given that recent US data publications produced less-than-ideal results, there is a likelihood that the coming week’s publications will yield similarly disappointing results. Additionally, the Federal Reserve will be publishing minutes from the most recent policy decision meeting and they have the potential to read dovishly given that Fed Chair Janet Yellen has attempted to talk down the Dollar in recent speeches.
For those invested in the US Dollar; ISM Non-Manufacturing Composite, Labour Market Conditions Change, Consumer Credit, Mortgage Applications, Initial Jobless Claims, Continuing Claims and the Monthly Budget Statement will be of interest.
Given the severity of the difficulties between Greece and its creditors, there is a high likelihood that the situation will deteriorate if the latest proposal isn’t accepted, which could prompt a Greek exit and an alliance with Russia.
Should the situation with Greece fail to find an amicable solution, the US Dollar is likely to surge thanks to its safe-haven properties.
Ahead of the Easter weekend, the Euro to US Dollar (EUR/USD) exchange rate advanced by around 0.46%.