Euro US Dollar (EUR/USD) Exchange Rate Flat as German Consumer Confidence Slides to Two-Year Low
The Euro US Dollar (EUR/USD) exchange rate remained muted and the pairing is currently trading at an inter-bank rate of $1.1188.
On Tuesday data revealed that the German GfK consumer confidence slipped below forecast, to 10.1 in June.
This likely dampened sentiment in the single currency as this was the lowest reading since April 2017.
Meanwhile, the main concern of traders is Italy.
Matteo Salvini’s right-wing League claimed victory in the European Parliamentary elections, taking 34.3% of the vote and 23 seats.
Commenting on this, Neil Mellor, Currencies Analyst at BNY Mellon said:
‘The League did fairly well. Someone like Salvini will see that as a mandate to continue doing what he is doing. We need to hear soothing words from the ECB [European Central Bank] for all to be well.’
Reports have also emerged suggesting that the European Union is likely to take disciplinary action on Italy on 5 June due to Italy’s increasing debt and structural deficit levels that break EU rules.
US Dollar (USD) Muted as Trump Pledges ‘Full Support’ to Japan-North Korea Talks
This week the US President Donald Trump visited Japan, and speaking on trade he stated on Monday that he expected the two countries to be ‘announcing some things, probably in August, that will be very good for both countries.’
However, the President has put further pressure on Tokyo to cut Japan’s trade surplus with the US.
Trump’s comments likely provided some relief to markets, and commenting on this Kumiko Ishikawa, Senior Analyst at Sony Financial Holdings stated:
‘While it’s positive that there will be time for solving the US-Japan trade issue, that doesn’t mean the problem has been resolved. [But] it’s providing some relief.’
Meanwhile, Trump has backed a possible face-to-face meeting between the leaders of Japan and North Korea.
Japanese Prime Minister Shinzo Abe said the US President had pledged his ‘full support’ to the meeting which he wants to have ‘frank’ discussions about North Korea’s Japanese abductees and nuclear policy.
Euro US Dollar Outlook: Will Lower-than-Forecast German Unemployment Buoy EUR?
Looking ahead to Wednesday, the Euro (EUR) could rise against the US Dollar (USD) following the release of the German unemployment data.
If it is revealed that unemployment in the bloc’s largest economy has slipped further than forecast in May, the single currency could rise.
Meanwhile, the US Dollar could rise against the Euro following the release of the US flash GDP data for Q1.
If data shows that the US economy has expanded more than predicted during the first three months of 2019, it could cause the Euro US Dollar (EUR/USD) exchange rate to slide.