EUR/USD Exchange Rate Rangebound as French Trade Balance Disappoints
The Euro US Dollar (EUR/USD) exchange rate is static today and is currently trading around $1.1229 on the inter-bank market.
The Euro (EUR) stabilised against the US Dollar (USD) following the publication of the German industrial production figures today, which came in at a better-than-expected 0.7%.
The German Ministry of Economy said in its statement:
‘The industrial sector is expected to remain subdued given the weak development in orders and the gloomier business climate. The construction sector remains in a boom. The relatively mild weather contributed to the good result in February.’
Today also saw the French trade balance figures for February which came in at a disappointing €-4.0bn.
The US Dollar, meanwhile, has been weakened as traders flee to riskier currencies as the US-Chinese trade talks edge ever closer to a trade deal.
US President Donald Trump has remained optimistic, saying:
‘This is an epic deal, historic – if it happens. This is the Grand Daddy of them all and we’ll see if it happens. It’s got a very good chance of happening.’
USD/EUR Exchange Rate Flat as US Non-Farm Payroll Figures Rise
US traders were buoyed today following the publication of the US nonfarm payrolls figures for March, which increased above expectation at 196K.
These were be followed by the US average hourly earnings figures for March, which, however, fell below expectation to 3.2%.
Today saw the publication of US labour data, with the unemployment rate for March remaining static.
EUR/USD Exchange Rate Steadies as Doubts Rise on UK Brexit Extension
Euro investors will be paying close attention to Brexit developments today, following the President of the European Council, Donald Tusk, agreeing in principle to push for a possible 1-year extension to allow the UK to secure a consensus within the British Parliament.
Guy Verhofstadt, the Chief Brexit Representative for the European Parliament, sounded doubtful, however, tweeting:
— Guy Verhofstadt (@guyverhofstadt) April 5, 2019
The Eurozone is also struggling as Germany’s manufacturing – which is particularly influential on the economy – has been hit by fears of a no-deal occurring between the UK and the EU.
Clemens Fuest, a German economist and former President of the IFO Institute for Economic Research, warned, ‘[Brexit] could be the straw that breaks the camel’s back.’
EUR/USD Forecast: Euro Could Rise if UK Brexit Extension is Granted
Euro traders will be looking ahead to Monday next week, which will see the publication of the German trade balance figures for February.
Monday will also see the release of the US factory orders figures for February, which are generally expected to decrease, potentially weakening the US Dollar.
Brexit developments will remain in key focus for single currency traders, and with any indications that the UK could leave the EU without a deal, this could see the value of the Euro fall.
The EUR/USD exchange rate will remain dictated by political developments, with Brexit likely to remain in the spotlight as the 12 April deadline ticks ever closer for the UK’s exit.