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Euro US Dollar 2017 Exchange Rate Falls as Draghi Press Conference Disappoints

  • Euro US Dollar 2017 Exchange Rate Just Below 1.07 – Holding near best levels in over a month
  • Solid Eurozone Figures Allow EUR to Hold Highs – Trump jitters weigh on USD strength
  • EUR Update: European Central Bank Disappoints – More dovish tone than hoped
  • USD Forecast: Markets Anxious for Trump Inauguration – Trump takes power this Friday

Euro US Dollar 2017 Exchange Rate Drops Following Draghi Press Conference

Thursday afternoon saw European Central Bank (ECB) President Mario Draghi hold his first press conference of the year, but while investors were previously excited they ended up disappointed at his all too familiar dovish tone.

Hoping for Eurozone inflation pressures to have improved due to the improved US inflation outlook, Draghi disappointed by stating the Eurozone economy’s inflationary pressure remained subdued.

As a result of this as well as statements that the Eurozone’s outlook still contained downside risks, the Euro US Dollar 2017 exchange rate performed limply in the afternoon and fell from its best weekly levels.

[Previously updated 12:48 GMT 19/01/2017]

The Euro US Dollar 2017 exchange rate advanced slightly on Thursday morning as investors awaited the European Central Bank’s (ECB) first policy decision of 2017.

No change to monetary policy was expected. Investors will be waiting for the afternoon’s press conference from ECB President Mario Draghi before they make their move on the Euro.

EUR USD movement saw little change after the ECB decision was announced. The interest rate remained at 0% and the deposit facility rate at -0.4% as expected.

Demand for the US Dollar was also weaker on Thursday as investors continued to sell the ‘Greenback’ ahead of Friday’s Donald Trump inauguration.

[Previously updated 16:35 GMT 18/01/2017]

Demand for thee Euro US Dollar 2017 exchange rate remained limp throughout Wednesday’s session, as strength slowly returned to the US Dollar making it difficult for the Euro to extend its gains or hold its best levels.

Wednesday’s American session saw the publication of December’s US Consumer Price Index (CPI) results, which met expectations and bolstered hopes that the US economy would remain sturdy during the beginnings of the Trump administration.

Thursday’s European session will be a big one for the Euro however, with the European Central Bank (ECB) set to hold its first meeting of the year followed by a press conference from ECB President Mario Draghi.

[Published 11:41 GMT 18/01/2017]

After a busy Tuesday, the Euro US Dollar 2017 exchange rate trended more flatly on Wednesday morning as traders awaited important events still to come throughout the week.

EUR USD has gained around half a cent on opening levels of 1.06 so far this week. On Wednesday, the pair was just below Tuesday’s high of 1.07, not seen since early December.

Euro (EUR) Sturdy as Inflation Stats Meet Expectations

While this week hasn’t been as eventful for Euro trade as it has been for other majors like the US Dollar and British Pound (GBP), the shared currency has still seen solid demand throughout the week so far, largely due to weak rivals and solid domestic ecostats.

Monday saw the Eurozone’s November trade surplus figures improve considerably more than expected, coming in at €25.9b.

This was followed on Tuesday by ZEW’s January economic sentiment surveys from January. Both Germany and the Eurozone’s results improved, to 16.6 and 23.2 respectively. However, sentiment did not improve as much as analysts expected.

Despite this, the Euro advanced on Tuesday due to broad weakness in the US Dollar.

Eurozone inflation figures were published on Wednesday. Germany’s final December inflation figures improved to 1.7% year-on-year as projected in the previous release. The monthly figure came in at 0.7%.

The Eurozone’s overall inflation results also met projections as expected. Yearly inflation printed at 1.1% while monthly inflation came in at 0.5%.

US Dollar (USD) Undermined by Trump Comments as His Inauguration Nears

The US President-elect flexed his now infamous ability to influence markets with mere words once more on Tuesday, sending US markets into a panic ahead of the inauguration on the 20th.

Trump controversially stated the following;

‘Our companies can’t compete with them [China] now because our currency is too strong, and it’s killing us‘

Economists were quick to take concern with Mr. Trump specifically targeting the value of the US Dollar. As Greg Anderson from BMO Capital Markets told Bloomberg;

‘We’ve worked long and hard to get to a protocol where heads of state, finance ministers and central banks don’t target and specifically mention levels of their currency. He just blew that.’

The US Dollar’s selloff was extended following the comments. The ‘Greenback’ had already been performing poorly on Tuesday as investors sold the currency from its highs amid uncertainty towards the coming week.

Euro US Dollar 2017 Forecast: European Central Bank Meeting in Focus Thursday

While slightly subdued trade is expected for the majority of Wednesday’s trade session (barring another unexpected market moving statement from the US President-elect) Thursday and Friday’s sessions have the strong potential to alter movement in the Euro US Dollar 2017 exchange rate.

Thursday’s European session will be the most important day this week for the Euro, as it will see the European Central Bank (ECB) hold its first monetary policy decision of 2017 – and the last before the Trump Presidency begins.

The ECB is not expected to announce any changes to monetary policy in this week’s meeting, but the tone taken in the following press conference will be key. Investors will pay close attention to any comments on economic outlook from ECB President Mario Draghi.

Thursday will also see the publication of the latest US jobless claims figures and building permits results from December.

As the week heads into its second half, the importance of Donald Trump’s inauguration on Friday should also be mentioned.

All market eyes are likely to be on the US Dollar and US economic throughout the day and volatility in USD is to be expected.

The very earliest actions Trump takes as US President on Friday evening and throughout the weekend will be carefully judged by investors, which could lead to sharp USD movements early next week.

EUR USD Interbank Rate

At the time of writing, the Euro US Dollar 2017 exchange rate trended in the region of 1.06, while the US Dollar Euro exchange rate traded at around 0.93.