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Euro US Dollar (EUR USD) Exchange Rate Tight as US PMIs Approach

  • Euro slips against USD – Minor losses come ahead of first weekly US data
  • US Dollar recovers in some pairings – Confidence remains fragile due to pessimistic PMI predictions
  • Eurozone GDP data incoming – Major US PMI results out tomorrow

Eurozone news today has seen the single currency drop off against a number of its peers, with the better-than-expected Eurozone retail sales result doing little to encourage lasting support for the single currency.

These losses are partly due to investor concerns about upcoming Eurozone data; while the retail PMI for August is expected to rise, forecasts have been for a decline in the GDP growth rate third estimates for Q2, on the quarter and the year.

The US Dollar has been rudderless today on low confidence in the US economy, with Labor Day preventing any possible positive data from coming out.

Looking ahead, the US Dollar stands to worsen in its condition when actual domestic data is released; the afternoon is expected to bring pessimistically-predicted US August composite and services PMIs, as well as a later non-manufacturing PMI for the same month.

(Last updated September 5th 2016)

The US Dollar has been in low-demand over the course of trading, on account of uncertainty-inducing comments from a notable Federal Reserve official.

Eurozone Economic News: Euro Remains Positive after Eurozone PMIs Worsen

The Euro has been in a position of strength against the US Dollar today, having risen by 0.2% against the ‘Buck’. In other pairings, the Euro has risen by 0.3% against the Australian Dollar (EUR AUD), but fallen by -0.6% against the Polish Zloty (EUR PLN).

This relatively positive performance for the Euro comes against the odds, given that the latest Eurozone data has seen the services and composite PMIs for August fall in their finalised forms.

France’s composite and services PMIs were exceptions to the rule, with gains being recorded for both fields in August.

US Dollar Softens after Fed’s Lacker Voices Support for Higher US Interest Rates

The US Dollar has opened trading in a state of weakness on Monday, with the latest domestic data out of the US coming late on Friday after a lower-than-expected payrolls result.

This consisted of a speech from Fed official Jeffrey Lacker who, while not a voting member of the Fed this year, holds a great deal of influence.

Lacker’s tone was broadly hawkish, although given that there is only around a 21% chance of a Fed rate hike taking place in September, investors seem to have been disheartened by these probabilities.

During his speech, Lacker argued that;

‘It appears that the funds rate should be significantly higher than it is now. The way the data is playing out, I think the longer we wait there is a material increase in risks that we run’.

Among the US Dollar’s losses so far have been declines of -0.3% against the Australian Dollar (USD AUD) and -0.2% against the Euro (USD EUR).

US coins

Future EUR USD Forecast: Eurozone Retail Sales due Shortly, US PMIs out Tomorrow

The immediate future will only bring economic data from the Eurozone, as US markets are closed for the US Labor Day holiday.

The next Eurozone data to watch out for will consist of the July retail sales result for the whole Eurozone; forecasts have been positive, with a rise expected on both the month and the year.

For the US, the first news of the week will come on Tuesday afternoon, when the finalised composite and services PMI results for August are announced; these are expected to fall in both fields. Also out will be the non-manufacturing PMI for the same month, which also has a decline in store.

Major Eurozone data due on Tuesday will consist of Germany’s construction PMI for August, as well as the Eurozone-wide August retail PMI and the third estimate of the GDP growth rate for Q2. The German PMI is forecast to fall, while the Eurozone retail figure has a rise in store. GDP is expected to be revised down on the quarter and the year.

Current EUR, USD Exchange Rates

The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.1168 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.8957 today.