Euro US Dollar (EUR/USD) Exchange Rate Steadies As Italy Shows Compromise Over Budget
The Euro US Dollar (EUR/USD) exchange rate steadied as Italy showed some signs of compromise over its controversial budget, and is currently trading at $1.14.
The US Dollar (USD) suffered a few blows before Thanksgiving Day with yesterday’s release of some weaker-than-expected economic data providing a leg-up for EUR.
Today EUR/USD looks set to keep up its momentum as US markets are closed for Thanksgiving.
Euro Gains Ground on US Dollar (EUR/USD) As Budget Solution Possibly In Sight between Italy and EU
The Euro US Dollar (EUR/USD) exchange rate strengthened as Italy’s Deputy Prime Minister Luigi Di Maio hinted at a possible ‘dialogue’ – even ‘a solution’ – developing between the European Commission (EC) and Italy.
However, his coalition partner and joint Deputy Prime Minister Matteo Salvini showed more resistance, despite yesterday’s conflicting headlines hinting at a possible softening in his stance.
Head of European Rates Strategy at Mizuho International Plc, Peter Chatwell, said:
‘The positive for the market here is the likely relief that the EU has been relatively neutral in its language.’
Traders will be scrutinising the European Central Bank’s (ECB) minutes from its 25 October meeting today, with any signs of division or tensions detected in the document causing concern for investors in the single currency.
The Euro US Dollar (EUR/USD) exchange rate’s current gains, however, may remain short-lived as today’s Eurozone consumer confidence figures are expected to drop to -3.0 today – indicating a likely decrease in spending which could dampen EUR.
US Dollar (USD) Weakens Against Euro (EUR) After Disappointing Durable Goods Figures
The US Dollar Euro (USD/EUR) exchange rate was hit yesterday by disappointing Durable Goods Orders figures, which dropped to -4.4% for October, showing slowing business investment and hinting at decreasing economic growth in the fourth quarter.
However the US Dollar (USD) was relieved slightly with increased home sales, which climbed to 1.4%, although these were down 5.1% the same time last year. Furthermore, these improvements arrived after Hurricane Florence and Michael lowered sales during September.
Bloomberg’s Economics Reporter, Katia Dmitrieva, Tweeted:
US existing home sales (make up about 90% of the market) rose 1.4% in Oct from prior month
– BUT down about 5% from last yr
– Prices still rising at slower pace (median up 3.8% YoY to $255,400
– Sales in Oct driven by condos (up 5.3%) while house sales were slower (up 0.9%)
— Katia Dmitrieva (@katiadmi) November 21, 2018
US Dollar (USD) Likely to Remain Quiet over Thanksgiving as Euro (EUR) Awaits Sunday’s Brexit Deal – or No Deal
As the US celebrates Thanksgiving today and markets remain closed, the ‘Greenback’ is likely to be weakened by thin trading volumes.
The Euro US Dollar (EUR/USD) exchange rate might fluctuate tomorrow with the release of Markit PMI figures due from the Eurozone.
Although expectations for the PMI figures remain generally bearish, any upside surprise could give EUR/USD a lift.
The US Dollar Euro (USD/EUR) exchange rate could also find strength from tomorrow’s Markit PMI figures, with an expected increase in November’s PMI figures presaging further confidence in the ‘Greenback’.
Overall, investors’ sights will be set on Sunday when the EU is due to meet with the UK to potentially seal a Brexit agreement.