On Thursday the Euro to US Dollar (EUR/USD) exchange rate was little-changed as a quiet trading session closed with mixed US data.
The Euro started to feel the pressure early in the European session as a poll conducted by Bloomberg News revealed that internationally based investors are concerned that the European Central Bank isn’t taking a tough enough stance in its attempts to bolster the Eurozone’s tentative return to growth.
The poll showed that over a third of participants believe that the region’s performance is deteriorating as persistently low inflation and geo-political tensions take a toll.
Germany, as the Eurozone’s largest economy, has been a particular cause for concern.
One of the survey’s respondents stated; ‘The Eurozone economy is deteriorating. European banks have more interest in deleveraging.’
Another intimated that it appears the ECB doesn’t appreciate the full magnitude of the problems at hand.
Further Euro losses were occasioned by a report detailing a significant decline in Construction Output in the Eurozone.
In May, construction output slumped by -1.5% (on a month-on-month basis) following a 0.4% increase in April that was smaller than originally forecast.
On an annual basis the pace of construction output fell from 7.4% to 3.5%.
Movement in the Euro to US Dollar exchange rate was minimal however, and few fluctuations occurred after the US issued a string of economic reports.
While US initial jobless claims were shown to have declined by more than anticipated in the week ending July 12th, US Building Permits and Housing Starts both registered unexpected declines.
Economist Ryan Wang said this of the claims data; ‘The broad array of indicators on the labour market have been showing some improvement. Layoffs already are at a low level, so now it’s more a question of whether the hiring pace that we saw in the first half of the year can be sustained.’
The negative impact of the housing data was somewhat offset by the US Philadelphia Fed Index for July, which pushed up from 17.8 to 23.9 in July rather than falling to 16.
The Euro to US Dollar exchange rate hit a high 1.3540 and fell to a low of 1.3514.
Tomorrow a lack of economic news could limit currency market movement, although the US University of Michigan Confidence index will be of interest.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,British Pound, 0.7910,
Euro,,New Zealand Dollar,1.5561,