The Euro to US Dollar (EUR/USD) exchange rate advanced by around 0.34% on Monday morning.
With German Trade Balance advancing beyond the median market forecast figure, the common currency strengthened versus the majority of its most traded currency rivals. The gains have been somewhat sluggish, however, as traders await Eurozone Investor Confidence data.
The US Dollar, meanwhile, is generally holding steady versus its major peers thanks to a lack of data to provoke movement. Given the distinct lack of influential domestic data, the US Dollar is likely to be subject to fluctuations in the currency market.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1344.
At the close of last week, the Euro to US Dollar (EUR/USD) exchange rate dived by around -1.28%.
After US Non-farm Payrolls data printed positively, the US Dollar strengthened versus the majority of its most traded currency peers. Rate hawks speculate that the Federal Reserve will be the first of the major central banks to normalise monetary policy, and every positive data release is compounding speculation.
The Euro was trending lower versus its major peers on Friday as a result of mounting tensions regarding a potential Greek exit from the Eurozone.
Euro (EUR) Exchange Rate Forecast to Fluctuate on Geopolitical Tensions
With the shadow of issues in Greece looming over the common currency, domestic data is unlikely to have as significant an impact as it would ordinarily. However, the fourth-quarter German Gross Domestic Product (GDP) and fourth-quarter Eurozone GDP has the potential to provoke Euro changes.
Although data is unlikely to have a major impact, there will be several publications of interest to those invested in the single currency. German Trade Balance, Eurozone Investor Confidence, German Consumer Price Index, Eurozone Industrial Production, French GDP and Italian GDP may cause Euro volatility.
US Dollar (USD) Exchange Rate Forecast to Strengthen on Policy Divergence
Given that the Federal Reserve have the advantage of policy divergence over most of the major central banks, the US Dollar is likely to find continued support. Additionally, the issues in Europe have dampened market sentiment. With the high likelihood that issues will not resolve quickly, demand for safe-haven assets is likely to support a Dollar surge.
Of most significance, in terms of its weighting to provoke volatility, will be Advance Retail Sales and the University of Michigan Confidence Index. Advance Retail Sales declined beyond expectations previously, but many experts are confident that sales will improve with low oil prices boosting consumer spending.
Additionally, Wholesale Inventories, Monthly Budget Statement, Retail Sales Ex Auto, Retail Sales Control Group, Initial Jobless Claims, Continuing Claims and Business Inventories will be of importance to those trading with the ‘Greenback’ (USD).
‘Economic activity has been expanding at a solid pace,’ the Fed’s policy-setting panel said in a statement that marked an upgrade to its prior assessment of a ‘moderate pace’ of growth.
‘We’re paying quite a bit of attention to the Greece situation, where there’s so much political and financial unrest. Investors are really looking for peace of mind, and it is difficult to get that,’ said Josh van Dress, chief investment officer of Able Capital Management in New York.
At the close of last week, the Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1330.