The Euro to US Dollar (EUR/USD) exchange rate is forecast to experience volatility next week as economists look ahead to the release of a wealth of economic data out of the USA and Eurozone.
The Euro to US Dollar (EUR/USD) Exchange Rate Fell To a Weekly Low Of 1.1075
Monday’s session will likely see the Euro weaken against the US Dollar and other major peers as market attention will focus on Monday’s crunch talks between Greece and its creditors in the European Union. Athens has less than a week to prove to the European Central Bank that it is serious about reaching an agreement with international lenders. If the talks on Monday result in another stalemate, fears will rise that the nation will not be able to pay off its debts.
On Tuesday, the Euro will come under more pressure as Greece will have to pay €745 million owed to the International Monetary Fund on May 12. If the country fails to make the payment and defaults, we can expect the single currency to fall as fears rise that the nation could be heading towards a ‘Grexit’.
The uncertainty caused by the Greek situation will likely allow the US Dollar to hold onto gains but the ‘Greenback’ could see its upward movement restrained if the latest JOLTs Job Openings data shows a fall. The USA’s monthly budget statement is also due for release.
Midweek, there is a wealth of data due out of the Eurozone. Of particular interest will be French, Finnish and German GDP quarterly expectation reports. French GDP is forecast to rise 0.3% from the preceding quarter’s figure of 0.1%. The German economy meanwhile is forecast to ease from 0.7% to 0.6%. If that happens, the Euro will weaken. Also due for publication will be Eurozone GDP, industrial production and ZEW Economic Sentiment Index data.
The US Dollar will be influenced by domestic Mortgage applications, and retail sales data releases. If the retail sales figure comes in below expectations, the ‘Greenback’ could soften, as concerns of a slowdown in the world are largest economy will rise.
On Thursday, the main data release of interest will be US Continuing Jobless Claims data for the week ending on May 2nd. Also due will be PPI data.
On Friday, the US Dollar will be influenced by Industrial Production, Manufacturing Production and Consumer Sentiment data.
The EUR/USD exchange rate will also be influenced by geopolitical factors. Deterioration in the Ukraine crisis will increase demand for the safer haven US Dollar.
More positive data out of Spain could restrain the Euro’s losses.
Inflation data out of Germany could offer support to the Euro if it comes in stronger. A rise will suggest that the European Central Bank’s quantitative easing programme is working to boost inflation.