The Euro (EUR) has trended narrowly against both the US Dollar (EUR/USD) and the Pound Sterling (EUR/GBP) today as Greek Prime Minister Alexis Tsipras faces the difficult task of implementing the required third bailout conditions while reducing their impact as part of his re-election promises.
German Factory Orders to Provide First Euro (EUR) Movement Tomorrow
The procedure Tsipras is currently going through is set to be concluded on Wednesday with a vote from Greek policymakers over whether they approve of the current measures, but ahead of this, tomorrow’s German Factory Orders will provide a more solid shunt to the Euro’s (EUR) value. Forecasts have been for a 5.6% increase in the annual non-seasonally adjusted result for August; if even slightly accurate, such a posting is sure to revive confidence in the common currency, given that the last printing saw a -0.6% decline.
The Euro (EUR) has advanced by 0.5% against the US Dollar (EUR/USD) today and has also gained a 0.2% lead on the Pound Sterling (EUR/GBP). This comes as the day’s Eurozone PMI results present an unclear picture to investors.
UK PMIs have Potential to Upset Current Rates if Forecasts are Exceeded
The next event in the trinity will be the UK Composite and Services PMIs for September; a slight decline is predicted in the former while the opposite has been forecast for the latter. It is worth remembering that the UK Services sector is one of the most important in the country, therefore even a drop for the Composite figure may not devalue Sterling (GBP) if the Services score rises considerably.
The Euro (EUR) had an incredibly bad run of luck last week when it came to data, although the week to come will provide plenty of opportunities for the common currency to redeem itself against the US Dollar (EUR/USD) and the Pound Sterling (EUR/GBP).
EUR/USD, EUR/GBP Exchange Rate News: Week to Forget for Euro Investors as Negative News Reigned
The last week for the Euro (EUR) was one of the worst seen for the single currency since the turbulent days of the Greek bailout, as the Euro was repeatedly shunted downwards in value by economic releases that provided no support whatsoever. On Tuesday, the bad news began with German CPIs for September either falling into negatives or hitting 0%; this was compounded on Wednesday by the German Unemployment Change seeing a 2k person rise and the Eurozone Unemployment Rate remaining at 11%.
Eurozone CPIs also disappointed, and indecisive PMI data and worsening PPI contractions for the Eurozone at the end of the week failed to lighten the mood. All in all, the Euro suffered tremendously last week, sparking renewed fears over possible further European Central Bank (ECB) quantitative easing (QE). The Euro’s lowest rate against the US Dollar (EUR/USD) last week was 1.1141; for the Pound Sterling (EUR/GBP) it was 0.7339.
US Dollar went Slow and Steady Last Week, No Major Overall Sterling Movement
The US Dollar (USD) had virtually opposite fortunes to the Euro (EUR) last week, receiving (for the most part) positive data that heightened expectations for the Fed raising the US interest rate on October 28th. In addition to having hawkish speeches from Fed policymakers, the ‘Greenback’ was also aided by upward leaps in Consumer Confidence for September and the Personal Consumption Expenditure Core for August. As a last-minute trip-up, however, the ‘Greenback’ dived on Friday when the US Change in Non-Farm Payrolls figure did not meet with forecasts.
The Pound Sterling also had supportive postings last week, although unlike the US, a dip in support on Wednesday resulted in Sterling ending the week at a similar value to opening levels. Mainly, the UK September Mortgage Approvals rose above expectations while the CBI Reported Sales for the same month did the same, but a mid-week dip in Consumer Confidence and a downwards GDP revision lowered support for the Pound. Towards the end of the week, some of the damage was undone by the Manufacturing and Construction PMIs for September both printing above forecasts.
EUR/GBP, USD Exchange Rate Forecast: US Monopoly on Results Slips Away This Week
In the week to come, the Euro (EUR), the US Dollar (USD) and the Pound Sterling (GBP) will be about-equally affected by their spread of results, although a ‘Super Thursday’ scenario could descend into a three-way brawl.
Data-representation for the Euro will come firstly tomorrow with the Eurozone Sentix Investor Confidence score, although like the Pound, central bank data will play the largest part in moving the currency in the week to come. The ECB Account of the Monetary Policy Meeting results are due on Thursday, with anything resembling positivity from the ECB over not applying further QE being likely to induce confidence in the Euro.
Following suit will be the US Dollar’s Thursday central bank posting from the Fed, which will be releasing the minutes for the last interest rate decision (September 16th-17th). Also worth looking out for will be the ISM Non-Manufacturing Composite for September on Monday, which is currently predicted to decline marginally.
For the Pound, influence will initially come from tomorrow’s Services and Composite PMIs for September, although later in the week on Thursday, the Bank of England (BoE) Interest Rate Decision and accompanying minutes will be out; hawkishness on the part of Monetary Policy Committee (MPC) members will naturally inspire confidence in a rate hike occurring sooner rather than later.
Last Week’s EUR, USD, GBP Exchange Rates
The Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1166, the US Dollar to Euro (USD/EUR) exchange rate was trending in the region of 0.8959, the Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7366, the Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3577, the US Dollar to Pound Sterling (USD/GBP) exchange rate was trending in the region of 0.6598 and the Pound Sterling to US Dollar (GBP/USD) exchange rate was trending in the region of 1.5160 at the close of the European trading session on Friday.