- Euro US Dollar 2016 Exchange Rate Struggles to Hold – Edges towards parity concerns
- EUR Update: November Flash PMIs Impress – But fail to give Euro a boost
- USD Update: Preliminary Durable Goods Orders Strong – Sends USD higher on Wednesday
- Forecast: Final Q3 German GDP Ahead – May not inspire weak Euro
Euro US Dollar 2016 Exchange Rate Hits New 2016 Lows
The Euro US Dollar 2016 exchange rate plummeted on Wednesday afternoon after spending most of the day fluctuating above the week’s opening levels. As a result, EUR USD fell to a new 2016 low of 1.05 and its lowest level since March 2015.
Wednesday morning’s preliminary November Eurozone PMIs failed to impress traders despite coming in above expectations in French and Eurozone results. Germany’s underwhelming Manufacturing PMI may have weighed on Euro appetite.
The US Dollar, on the other hand, saw yet another day of bullishness when American markets opened on Wednesday afternoon. October’s preliminary US durable goods orders report improved from -0.3% to 4.8%, which gave the ‘Greenback’ a sturdy boost.
(Previously updated 16:57 GMT 22/11/2016)
Euro US Dollar 2016 Exchange Rate Struggles to Hold Highs
Despite attempting to edge higher on Tuesday morning, the Euro US Dollar 2016 exchange rate fluctuated on Tuesday afternoon as the US Dollar strengthened once American markets opened for the day.
Bets of a December Federal Reserve interest rate hike hit 100% for the first time which excited traders and left the ‘Greenback’ stronger once again.
The Euro could see more sustained support on Wednesday however, if November’s preliminary Eurozone PMI scores come in above expectations and impress investors.
(Published 12:35 GMT 22/11/2016)
The Euro US Dollar 2016 exchange rate continued to edge higher on Tuesday, continuing Monday’s gradual recovery as markets adjusted their positions following a week of solid EUR USD losses. Underlying factors in the US Dollar remained strong.
EUR USD began the week trending near 1.05, its lowest levels since November 2015 after last week’s ‘Greenback’ bullishness took the pair down over two cents. Since Monday, EUR USD has recovered slightly and now holds above the key level of 1.06 once more.
Euro (EUR) Bolstered by Hopes for 2017’s German and French Elections
Traders returned to the Euro on Monday in order to buy the shared currency from the lows seen over the weekend. This recovery was also supported by the latest developments in the Eurozone’s upcoming political events.
While the shared currency’s strength was limited by news that Italy’s December constitutional referendum was looking bad for Prime Minister Matteo Renzi, other Eurozone political factors left traders a little more optimistic.
German Chancellor Angela Merkel revealed that she would stand for a potential fourth term in 2017’s German election, increasing hopes that she would be able to withstand the increasing strength of populist party Alternative for Germany (AfD).
Meanwhile in France, François Fillon pulled off a surprising win in the first round of France’s Republican primary, increasing hopes that he would emerge as the new favourite to beat the National Front’s populist leader Marine Le Pen in 2017’s French election.
The rise of populist protectionism has been seen by some analysts as the biggest potential threat to the Euro project. If a key Eurozone nation were to pull out of the bloc, investors fear how this could affect the shared currency.
As a result, hopes to keep these protectionist politics at bay have left the Euro stronger this week.
US Dollar (USD) Sold from Highs as Markets Cool on Trump Rally
Since Republican Donald Trump was elected as the next US President on the 8th of November, US markets have rallied on hopes that Trump’s plans for short-term economic stimulus would lead to US economic growth in 2017.
Investors have also traded under hopes that a President Trump would be more pragmatic on things like trade than he had been with his controversial anti-trade proposals on the campaign trail.
This as well as high bets of a Federal Reserve rate hike in December left the US Dollar surging throughout last week, but its demand slowed towards the end of the week and by Monday this week its bullishness had faded.
Underlying factors in USD trade remain strong and betting futures of a December Fed rate hike remain above 90%. Despite this, the US Dollar was sold on Monday and Tuesday as traders took profit from the ‘Greenback’s highest levels.
Investors also began to grow jittery on the prospect that the Trump administration would still be anti-trade, which could send markets into a panic and left traders cautious on further US bullishness.
Euro US Dollar 2016 Exchange Rate Forecast: Key Ecostats Due for Publication Wednesday
The Euro US Dollar 2016 exchange rate may struggle to maintain its gradual upward trajectory as the week goes on and corrective trade from the weekend’s lows fades.
However, during Wednesday’s session both the Eurozone and US will see the publication of key ecostats that may influence EUR USD direction in the next few days.
The Eurozone’s preliminary November PMIs from Markit will be published on Wednesday morning. If these figures indicate that the Eurozone’s economic activity continues to improve it may offer the Euro additional support and even ease European Central Bank (ECB) stimulus concerns slightly.
Over in the US, Wednesday’s American session will see the publication of October’s preliminary US durable goods order figures, which are expected to improve to 0.8%. The latest US jobless claim results and October home sales will also be published.
As of Tuesday, the Euro US Dollar 2016 exchange rate trended with a slowing upside bias. If Wednesday’s Eurozone data impresses while US data disappoints, this movement could be extended.
Otherwise, the Euro is likely to lack the upside factors needed to continue to make a solid recovery against a US Dollar which continues to have significant positive sentiment behind it.
At the time of writing, the Euro US Dollar 2016 exchange rate trended in the region of 1.06, while the US Dollar Euro exchange rate traded at around 0.94.