Homepage » News » EUR/USD » Euro US Dollar (EUR/USD) Exchange Rate Steady as Eurozone Records Weakest Growth in 7-Years

Euro US Dollar (EUR/USD) Exchange Rate Steady as Eurozone Records Weakest Growth in 7-Years

Euro US Dollar currency forecast

EUR/USD Exchange Rate Rangebound, German GDP Stagnates in Fourth Quarter

The Euro US Dollar (EUR/USD) exchange rate held steady today, with the pairing currently trading around $1.084 after the release of the flash German GDP report for the last quarter of 2019 undershot forecasts and stagnated at 0%.

Today also saw the Eurozone’s preliminary growth figure for the fourth-quarter his a 7-year low at 0.9%.

Andrew Kenningham, an economist at Capital Economics, was downbeat in his forecast, commenting:

‘We think the economy will continue to flirt with recession in the first half of this year.’

With Germany being the Eurozone’s largest economy, today’s data has left single currency traders feeling jittery over the now more real prospect of a recession.

Joshua Mahony, Senior Market Analyst at IG, commented:

‘The German economy has gone from being the bastion of Eurozone growth to perhaps the greatest hindrance, with the industrial powerhouse continuing to suffer under the wrath of Donald Trump’s combative approach to global trade.’

USD/EUR Exchange Rate Steady, US Retail Undershoots Forecasts for January

The US Dollar (USD) struggled to gain in spite of the better-than-expected US Michigan Consumer Sentiment Index gauge for February, which beat forecasts and rose from 99.8 to 100.9.

Today also saw the release of the US Retail Sales report for January, which undercut forecasts and flat-lined at 0%, leaving some ‘Greenback’ traders concerned that the American economy could be slowing down.

Katherine Judge of CIBC Economics commented:

‘American retailers didn’t get much love in January. Given the strong pace of job gains and signs of rising wages, this pace of retail sales is certainly sustainable and it may increase a bit in coming months.’

US Dollar (USD) traders are also remaining cautious, however, as their sights turn to China’s coronavirus outbreak. Any signs that this could hinder America’s economic developments in the near-term has caused market confidence in the ‘Greenback’ begin to slip.

EUR/USD Outlook: Could the ‘Greenback’ Rise as Risk-Off Market Mood Continues?

Euro (EUR) investors will be looking ahead to Tuesday’s release of the German ZEW Survey of Economic Sentiment for February, which is expected to slip from 26.7 to 20.4.

As the German economic outlook continues to darken, we are likely to see the single currency begin to slip against the US Dollar next week.

The US Dollar (USD), meanwhile, will likely continue to rise as safe-haven demand increases amid uncertainty over China’s coronavirus epidemic. Consequently, we are likely to see the EUR/USD exchange rate slump early next week.