Any hopes of a Euro (EUR) rally have been dashed today as the third quarter German Gross Domestic Product printed at a weaker level than expected.
News from Greece and Portugal Weighs on Common Currency (EUR), US Dollar (USD) Softened by Non-committal Yellen
Trading has been rather volatile on the Euro to US Dollar (EUR/USD) this week, as political developments within the Eurozone have weighed heavily on the single currency (EUR). In a rather fast turnaround, Portugal’s centre-right government was ousted from power on Tuesday by an anti-austerity coalition of left-wing parties, raising concerns of potential instability and financial turmoil. Greece, meanwhile, returned to the headlines as a general strike brought the country to a halt and the Hellenic nation was denied its latest tranche of bailout funds. Ministers have until Monday to reach an agreement with creditors over divisive alterations to foreclosure laws, and while the attitude appears optimistic this has not prevented traders moving away from the Euro.
Both the US Initial and Continuing Jobless Claims figure printed at higher levels than anticipated, indicating that the domestic employment picture is not quite as bullish as pundits might have thought. Fed Chair Janet Yellen also failed to encourage the odds of an imminent interest rate increase at the December policy meeting, avoiding the topic in a speech in Washington yesterday. Although this did initially dampen the US Dollar (USD), however, the EUR/USD exchange rate soon returned to a downtrend.
Euro Currency News: EUR Extends Slump Today as German GDP Falls Short of Forecast
The outlook has not improved for the Euro on Friday, following a raft of generally disappointing third quarter Eurozone GDPs. While France did surprise with unexpected growth of 0.3% on the quarter traders were concerned by a rather less positive net trade figure, which saw a slump in exports shear 0.7% off the nation’s GDP. Meanwhile, both the German and Italian results fell short of forecast, clocking in at quarterly growth of 0.3% and 0.2% respectively. This did not appear to bode particularly well for the upcoming overall Eurozone figure, as the currency union shows clear signs of slowness in the face of negative global pressures.
EUR/USD Exchange Rate Forecast: ‘Greenback’ Volatility Predicted on Upcoming US Retail Sales and Confidence Index
This afternoon’s US Advance Retail Sales and University of Michigan Confidence Index are expected to have strengthened on the month. A positive showing is likely to add further support to the chances of the Federal Open Market Committee (FOMC) voting to raise interest rates at next month’s policy meeting, a prospect that will drive up demand for the US Dollar and extend the present losses of the EUR/USD exchange rate.
Current EUR, USD Exchange Rates
At time of writing, the Euro to US Dollar (EUR/USD) exchange rate was in a strong downtrend in the region of 1.0753, while the US Dollar to Euro (USD/EUR) pairing was bullish in the range of 0.9297.