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Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Dive as Traders Bring Forward Fed Liftoff Bets

Euro Exchange Rates Today

UPDATE

The Euro to US Dollar (EUR/USD) exchange rate dived by around -0.69% on Tuesday morning.

With increasing fears that Greece will not be able to secure bailout funds within the time limit set out by the Eurogroup, the shared currency softened versus its major peers. As the Hellenic nation has depleted all of its cash reserves in previous payments to creditors, the likelihood of defaulting on June’s payments is very high.

The US Dollar, meanwhile, strengthened across the board after Federal Reserve Chair Janet Yellen stated that a rate hike cycle is very likely to see liftoff in 2015. With several influential data publications due later on Tuesday, however, there is a high likelihood of Dollar volatility.

The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.0895.

Towards the end of Friday’s European session, the Euro to US Dollar (EUR/USD) exchange rate dived by around -0.68%.

Although European economic data printed relatively positively on Friday, the shared currency softened versus many of its major peers. The depreciation can be linked to speculation that Greece will fail to unlock bailout funds before the International Monetary Fund (IMF) payment due in June.

The US Dollar, meanwhile, strengthened in response to Consumer Prices data meeting with median market forecast figures. A rise in Real Average Weekly Earnings also prompted a ‘Greenback’ (USD) upswing.

Euro (EUR) Exchange Rate Forecast to Fluctuate on Geopolitics

With the situation in Greece dominating trader focus, the single currency is likely to fluctuate over the course of next week. Whilst Greece claims that a bailout deal is close, many other European officials disagree. The developments over the coming week will be key in deciding Greece’s future as a member of the currency bloc.

Although European data is unlikely to be particularly impactful with trader focus dominated by the situation in Greece, there will be a few data publications over the coming week that has the potential to provoke Euro movement. Of most significance will be German Retail Sales, German Consumer Confidence and Italian Gross Domestic Product data.

US Dollar (USD) Exchange Rate Forecast to Soften on Domestic Data

If recent weeks are any indication, the forthcoming week’s US data publications are likely to produce mixed results which err towards the negative. If US data does prove dissatisfactory, the ‘Buck’ (USD) will depreciate versus its major competitors.

There will be several very important US data publications over the coming week. The Gross Domestic Price  Index, Personal Consumption, Annualised Gross Domestic Product, Consumer Confidence and Durable Goods Orders all have the potential to initiate US Dollar volatility. Should any of these influential publications print disappointingly, the ‘Buck’ will soften considerably.

The Euro to US Dollar (EUR/USD) exchange rate was trending within the parameters of 1.0999 – 1.1208 during Friday’s European session.