EUR/USD Exchange Rate Rangebound as US Economy under Threat from Chinese ‘Retaliation’
The Euro US Dollar (EUR/USD) exchange rate is steady today and is trading around $1.116 at the time of writing.
The US Dollar (USD) fell against the Euro (EUR) as fears raise over American businesses in China, with the superpower threatening to hike up tariffs on China-based US businesses in retaliation to US action against the Chinese telecom giant, Huawei.
AmCham China Chairman Tim Stratford, commented:
‘[T]here are concerns that the government of China may decide to retaliate against American companies… These are real concerns, and they increase the risk as people are considering how they should make adjustments to their business models.’
US President Donald Trump, meanwhile, is coming under increasing pressure from impeachment threats from House Leader Nancy Pelosi, who is accusing Trump of a cover-up in preventing congressional committees a full investigation of him.
With this combination of US-China trade tensions and political uncertainty, the ‘Greenback’ has struggled to gain against the Euro.
EUR/USD Exchange Rate Flat as Euro Traders Brace for European Elections
The Euro has steadied meanwhile on a lack of economic data, and with many single currency traders focusing on the upcoming European Elections.
However, as tensions mount between Eurosceptic parties, Euro traders are beginning to feel jittery as EU integrity is threatened.
Italy’s controversial deputy Prime Minister Matteo Salvini, has continued to cause divides.
Salvini commented yesterday:
‘This vote is about Europe, to change Europe, to change banks, agriculture, borders. Nothing is going to change within the Italian government.’
The UK’s Brexit party is also raising concern, with polls indicating that it is gaining a majority over the major UK parties.
EUR/USD Outlook: European Political Developments to Remain in Focus
Euro traders are looking ahead to tomorrow’s publication of the flash German Markit Manufacturing PMI figures for May, which are expected to improve.
These will be followed by the Eurozone’s preliminary Markit PMI composite figures for May, which are also expected to rise.
German GDP figures for the first-quarter, meanwhile, are expected to remain static at 0.4%.
There is a slew of US data due out tomorrow, with ‘Greenback’ traders taking particular note of the jobs figures.
Tomorrow will also see the flash US Markit Manufacturing PMI figures for May, which are expected to ease.
The EUR/USD exchange rate will be driven by political developments over the next few days, with the European Elections remaining in key focus for many Euro traders.