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Euro to US Dollar (EUR/USD) Exchange Rate Plunges Ahead of European News

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Despite last week’s impressive manufacturing reports for the Eurozone and its largest economy, the Euro was struggling against several of its major rivals and closed the week softer against the Pound and ‘Greenback’.

The common currency recorded a 1.2 per cent five-day decline against the US Dollar, its worst drop for two months.

Before the Christmas break the Euro was performing strongly, enjoying an extended rally as fundamentals broadly improved and the region’s major economies enjoyed comparative political stability.

As market analyst Eimear Daly observed; ‘The risk-off trading in foreign-exchange markets is completely at odds to robust economic indicators we have seen recently. I expect next week to bring a return to fundamental currencies levels as traders return from extended holidays […] The plethora of manufacturing PMI data points to strong near-term global growth in 2014 and certainly does not justify the underperformance of risk and the move into safe-haven currencies we have seen.’

Similarly, forex strategist Sebastien Galy asserted; ‘The drop in Euro-Dollar is mainly technical in nature. A phase of consolidation at such high levels is nothing unusual.’

Given the stream of influential data releases due out this week, significant market movement can be expected.

While investors will of course be looking ahead to Thursday and the European Central Bank’s rate decision, today’s Eurozone/German services PMI, Eurozone investor confidence and German inflation figures are also likely to trigger Euro movement.

Economists have forecast that the Eurozone’s services sector expanded in December, as did that of its largest economy.

Separate reports are expected to show that the French and Italian services sectors contracted in the final month of 2013.

Today’s US ISM non-manufacturing report will also drive EUR/USD fluctuations.

As every piece of upbeat economic data for the US will heighten the speculation surrounding the prospect of the Federal Reserve trimming stimulus when it meets later this month, influential reports will be watched closely.

Euro (EUR) Exchange Rates

As of 07:00 am GMT

The Euro/US Dollar Exchange Rate is currently in the region of: 1.3576 <

The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8300 >

The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.5178 <

The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6456 >

The Euro/ Canadian Dollar Exchange Rate is currently in the region of: 1.4429 <