Euro to US Dollar Exchange Rate Continues to Slide amid Eurozone Growth and US-China Jitters
Poor Eurozone data and rising market demand for safe haven currencies like the US Dollar (USD) left the Euro to US Dollar (EUR/USD) exchange rate tumbling last week, and a lack of fresh Euro (EUR) demand today meant that the pair remained weak.
Last week’s news meant steady losses for EUR/USD throughout last week, as the pair fell over a cent from 1.1456 to 1.1321.
EUR/USD remained unappealing this morning and briefly slipped to 1.1297 – the pair’s worst level since the 13th of November, almost three months ago.
Investors remain concerned about the Eurozone’s economic outlook today, but USD lacked the drive to push much further as investors steadied on the safe haven currency ahead of a fresh round of US-China negotiations.
Euro (EUR) Exchange Rate Lacking Support Following Last Week’s Growth Concerns
After solid losses last week on the back of disappointing data from Germany, the Euro remained unappealing today and investors lacked any reason to buy the shared currency again.
Slews of disappointing data from Germany have worsened market concerns that the Eurozone’s biggest economy could be headed towards a recession.
It followed news that Italy’s economy had slipped into recession in recent quarters as well.
Due to expectations for weaker German economic growth, the EU cut its Eurozone growth forecast for 2019 from 1.9% to just 1.3% last week.
With the Euro’s biggest rival, the US Dollar, sturdier amid market demand for safe haven currencies, this has weighed further on the shared currency.
US Dollar (USD) Exchange Rates Steady Ahead of Fresh US-China Talks
The US Dollar easily benefitted from the Euro’s weakness over the past week. This was due partially to the negative correlation the currencies share, but the US Dollar saw further support amid market demand for safe haven currencies.
Towards the end of the week, US President Donald Trump indicated that he would not meet with China President Xi Jinping again before a March deadline, after which the US is set to introduce further trade tariffs on China.
This worsened concerns that the US and China would not be able to agree to a trade deal and left investors hungrier for safe haven currencies like the US Dollar.
The US Dollar has also benefited from strong US data, which has kept Federal Reserve interest rate hike bets afloat despite the bank’s recent dovishness.
Euro to US Dollar (EUR/USD) Exchange Rate Investors Await US-China Talks
The Euro to US Dollar (EUR/USD) exchange rate is unappealing, but largely steady as investors are waiting for shifts to market risk-sentiment before making big moves on the pair.
US-China trade negotiations are resuming this week with will be deal with issues such as intellectual property (IP). If the talks go well, investors will become more willing to take risks again and the US Dollar will be less appealing.
On the other hand, EUR/USD could tumble if the talks lead nowhere or tensions between the US and China flare up again.
Euro investors will be awaiting data due for publication in the coming sessions, with the Eurozone’s industrial production figures due on Wednesday and growth data from Germany and the bloc overall on Thursday.
Strong Eurozone data would bolster Euro demand, but the US Dollar could keep pressure on the Euro to US Dollar (EUR/USD) exchange rate if Wednesday’s US inflation data is stronger than expected.