Sharp Drop in German Industrial Orders Fails to Prevent EUR/USD Exchange Rate Rise
The Euro (EUR) to US Dollar (USD) exchange rate has risen by 0.3% today, trading at a level of $1.1589.
Recent EUR/USD exchange rate losses mean that this is a recovery rather than a fresh high for the Euro; support has come from a weaker US Dollar.
Germany’s trade balance for June has shown a smaller-than-expected surplus expansion, while industrial orders have fallen by more than forecast.
This latter data has been especially unsupportive for the Euro, as the -0.9% drop in orders is reportedly the sharpest drop in almost one and a half years.
Commenting on the latter data, ING Bank Economist Carsten Brzeski said:
‘Disappointing new orders data shows tentative signs of trade tensions hitting the German economy, which doesn’t bode well for the industrial outlook in the second half of the year.’
Imposition of Iranian Sanctions Triggers US Dollar to Euro (USD/EUR) Exchange Rate Drop
The Euro (EUR) has faced headwinds from today’s German industrial data, but the US Dollar (USD) has fallen because of greater pressure from trading news.
US President Donald Trump has escalated the US-Iran diplomatic conflict by announcing that sanctions against Iran have ‘officially been cast.’
Mr Trump has added that ‘Anyone doing business with Iran will NOT be doing business with the US’, a sentiment which risks disrupting global trade.
Euro to US Dollar Exchange Rate Forecast: Are EUR/USD Losses ahead on US Confidence Stats?
The Euro (EUR) has risen against the US Dollar (USD) so far today, but the EUR/USD exchange rate could drop this afternoon when US confidence data comes out.
The main US data release will be a measurement of economic optimism in August, which is tipped to grow from 56.4 points to 57.2.
Such a result could raise confidence among USD traders and trigger a USD/EUR exchange rate rise, depending on the market reaction.
Another potential source of US Dollar support today will be a crude oil stock measure, which is expected to show a reduction in US crude oil reserves.
This might cause a sudden increase in crude oil prices, which would benefit US oil exporters and by extension the US economy.
The week’s next notable Eurozone data isn’t out until Thursday morning, when a European Central Bank (ECB) economic bulletin is due out.
This could cause EUR/USD exchange rate gains if it includes a positive economic forecast; such an outlook could raise hopes for an early-2019 ECB interest rate hike.