Euro US Dollar (EUR/USD) Exchange Rate Muted as New York Factories Return to Growth
The Euro US Dollar (EUR/USD) exchange rate remained muted and the pairing is currently trading at an inter-bank rate of $1.1266.
On Monday afternoon data revealed that factories in New York returned to growth.
The Empire State Manufacturing Index jumped to 4.3 in July, rebounding from June’s disappointing slump of -8.6.
The ‘Greenback’ was provided with an upswing of support as this is the largest turnaround in two years.
However, this could do little to buoy the Dollar against the single currency.
US Dollar (USD) Flat as US Tariffs Have a ‘Major Impact’ on Chinese Economic Growth
Meanwhile, US President Donald Trump stated that slowing economic growth in China was due to US-China trade tensions.
He noted that US tariffs were having ‘a major impact’ and warned that ‘possibly much more’ were to come.
Data showed that Chinese economic growth slowed to 6.2% during Q2, the weakest pace in at least 27 years.
In a tweet, the US President wrote:
‘This is why China wants to make a deal with the US, and wishes it had not broken the original deal in the first place.’
Euro (EUR) Range Bound as Markets Price in a Dovish ECB
The single currency remained range bound on Monday thanks to market expectations for a dovish European Central Bank (ECB) meeting next week.
Markets have priced in an ECB rate cut of 10 basis points in both September and another in March.
This month’s meeting could reinforce these expectations for a dovish ECB.
Commenting on the Euro US Dollar exchange rate, FX Strategist at Societe Generale, Kit Juckes said:
‘For the world’s most-traded and least-exciting currency pair, a dovish Fed, a weak-dollar President and a hint of global economic optimism, ‘ought’ to mean EUR/USD rallies. If it can’t stage a move back to 1.14 in the next week or two, what on earth could make it rally?’
Euro US Dollar Outlook: Will Better than Expected US Retail Sales Buoy USD?
Looking ahead to Tuesday, the Euro (EUR) could slump against the US Dollar (USD) following the release of the German ZEW economic sentiment survey.
The single currency could be left under pressure if economic sentiment slumps further than expected in July.
Meanwhile, the US Dollar could edge up following the release of the US retail sales data.
If retail sales rise higher than forecast in June, the Euro US Dollar (EUR/USD) exchange rate could slump.