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Euro US Dollar (EUR/USD) Exchange Rate Falls as Eurozone Economy Hit by Weak Data

EUR/USD Exchange Rate Steadies on Poor Eurozone Data

The Euro US Dollar (EUR/USD) exchange rate fell today and is currently trading around $1.1419 on the inter-bank market.

EUR fell against the US Dollar (USD) after the publication of the Eurozone’s composite PMI figures for January slipped to 51.0, drawing it closer to contraction.

Euro traders were unmoved, however, by the releases of the Spanish services PMI figures for January, which increased to a better-than-expected 54.7.

The French services PMI figures for January also caused a drag on the Euro, which drew further into contraction, with the Italian ones falling further to 49.7.

EUR traders are becoming increasingly concerned as Italy – which is the Eurozone’s third-largest economy – continues to suffer after slipping into a recession last week following poor GDP figures.

Chris Williamson, a Chief Business Economist at HIS Markit, concluded today’s disappointing Eurozone data releases, commenting:

‘The deteriorating picture looks broad-based. Italy is in its steepest downturn for over five years and France has sunk into its sharpest decline for over four years. Faster growth in Germany and Spain meanwhile looks tenuous, as order book trends deteriorated in both cases.’

The US Dollar, meanwhile, gained on the single currency despite the publication of its Markit composite PMI figures for January falling below expectation to 56.7.

These were followed by the printing of the US ISM non-manufacturing PMI figures for January, which remained unmoved at 54.2.

US Dollar Euro (USD/EUR) Exchange Rate Rises despite Mounting Tensions over Trump’s State of the Nation Speech

USD investors, meanwhile, are becoming increasingly skittish as the divide between the White House and the House of Representatives continues to widen, with US President Donald Trump due to deliver his State of the Union speech today to a generally hostile audience.

Donald Trump tweeted:

Trump is continuing to increase the US military presence at the Mexican border, and yesterday hinted at calling for a ‘national emergency’, leaving many ‘Greenback’ investors feeling nervous that the US government could once again shut down.

EUR/USD Forecast: Euro Could Rise if US Domestic Political Rows Flare Up

EUR investors will be looking ahead to tomorrow’s publication of German factory orders figures for December, which are expected to increase – potentially providing some much-needed uplift for the single currently.

USD traders, meanwhile, will be awaiting tomorrow’s printing of the nonfarm productivity figures for the fourth-quarter which are expected to decrease.

These will also be followed by the publication of the US trade balance figures for November which are also expected to slip, potentially weakening the USD/EUR exchange rate.

The EUR/USD exchange rate will likely remain sensitive to political developments, with particular focus being on the US as tensions between Donald Trump and the House of Congress are expected to flare up following the State of the Union speech today.