EUR/USD Exchange Rate Slips as Signs of US-China Progress Emerge
The Euro fell against the Dollar this morning, and is currently trading at a rate of $1.1527.
Weak industrial output figures from France did little to aid the Euro, as the volume of production fell by a further-than-expected -1.3%.
At the same time, the release of positive, seasonally adjusted Italian retail sales figures, which remained steady at 1.6% did little to boost the Euro.
Signs of progress between the US and China seem to have been made over the course of trade talks that began at the start of this week’s session, leading the US Dollar to slip against the Euro as global risk sentiment declines.
The US trade delegation’s statement stated that China has agreed to purchase ‘a substantial amount of agricultural, energy, manufactured goods, and other products and services’ which shows signs of progress is being made.
Lowest Eurozone Unemployment in a Decade Buoys Euro
The Euro strengthened against the US Dollar yesterday over the course of the afternoon, as the single currency was buoyed by the release of the most recent unemployment figures.
Unemployment within the Eurozone fell from 8.0% to 7.9%, a better than expected result saw the unemployment rate reach its lowest levels in a decade.
German import and export figures released earlier in the morning did little for the Euro, as both figures fell by more than expected.
Exports fell to -0.4% in November from the previous 0.9%, and imports dropped further, to -1.6% from the previously adjusted 0.8%.
Dovish Federal Reserve Weighs Down US Dollar
Yesterday saw the end to the three-day trade talks between the US and China in Beijing, with the extra, unscheduled day further decreasing global risk sentiment, leading to a fall in US Dollar exchange rates.
Investors pulled out of the safe-haven USD, opting instead for more risk-sensitive currencies, causing the Dollar fall to its lowest level since October.
The release of the FOMC minutes from December’s meeting signalled that the Federal Reserve is going to take the ‘patient’ approach that Fed Chair Jerome Powell highlighted in his speech last week.
This dovish approach to monetary policy is a likely cause for the US Dollar to be weighed down today.
EUR/USD Exchange Rate Outlook: Will the Euro Slide Further on the Back of Weak Economic Sentiment?
This afternoon will see the release of the US continuing jobless and initial jobless claims, which are both forecast to fall compared to the previous release.
If this is the case, it could see the Dollar hold up against the Euro.
The Euro could potentially claw back some of the losses it has suffered in the session today with the release of the ZEW economic sentiment survey for January, with any improvement on the previous figure likely to see the Euro make gains.
The latest US Consumer Price Index (excluding food and energy) is to be released tomorrow with the forecast suggesting it will remain steady at a rate of 2.2%, although if this figure increases it could prove bullish for the Dollar, boosting it further against the Euro.