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Euro to US Dollar Exchange Rate News: EUR/USD Forecast To Fall this Week As Greece Worries Set To Dominate Sentiment

The Euro to US Dollar (EUR/USD) exchange rate is forecast to fall next week as uncertainty over the Greek debt crisis is set to remain. Patience with Greece is quickly running out and the language from the nation’s creditors has turned increasingly hostile.

The Euro to US Dollar (EUR/USD) traded at a range of 1.1077 to 1.1371 in the week of June 8 to 12

Fears of a default have heightened and the International Monetary Fund (IMF) walked out of talks due to a lack of progress being made.

Economists are weighing up the possibilities for the Greeks. Some don’t believe that Greece is capable of introducing a replacement currency.

‘People are really fed up with this. They’ve never seen anything so completely ridiculous, frankly speaking, from a debtor country. Arranging the production of new banknotes wouldn’t be an easy task for a government that cannot organise a barbecue. I really don’t believe they have either the political or technical ability of starting their own currency. Money needs to be a commodity of trust, and I don’t think they have the trust in the population,’ said UniCredit chief global economist Erik Nielsen in an interview with Bloomberg.

Next week the US Dollar is likely to get off to a strong start as it finds support from Friday’s stronger than forecast preliminary consumer sentiment report. According to the Thomson Reuters/University of Michigan preliminary June index, sentiment increased from the preceding month’s figure of 90.7 to 94.6. Economists had been forecasting for a slight uptick to 91.5.

‘Consumer confidence rebounded in early June, regaining its average level recorded since the start of the year. The June gain was due to the most favourable personal financial prospects since 2007, with households expecting the largest wage gains since 2008,’ said Surveys of Consumer chief economist Richard Curtin.

The Euro will experience further volatility on Tuesday due to the release of German ZEW and Eurozone Employment change data. It will be Wednesday however, that will see the EUR/USD make its biggest movements as Eurozone inflation data is due for release and the latest interest rate decision by the Federal Reserve will be announced. Investors will be looking for any indication that policy makers are still on track to hike rates in September.

The situation in Ukraine continues to lurk on the sidelines but has the potential to influence the markets if the conflict intensifies. The US envoy to the United Nations accused Russia of making outright lies on its involvement in the fighting.

Also of interest will be Thursday’s US inflation and current account data.

Eurozone current account data due for release on Friday is forecast to show a decline of the surplus from €24.9 billion to €21.1 billion.

The Eurogroup meeting due to be held on June 18 could be a decisive moment for the Greece crisis. Time is rapidly running out for a deal to be made.

On Monday, the Euro to US Dollar was trading in the region of 1.1235