EUR/USD Exchange Rate Flat, ‘Clock Ticking’ for US-China Trade Deal
The Euro US Dollar (EUR/USD) exchange rate held steady today, with the pairing currently trading around $1.106 after investors have become increasingly cautious due to a lack of progress on the US-China trade front.
Robert Carnell Chief Economist and Head of Research at ING Bank, Asia-Pacific, commented:
‘With the clock ticking until the Schedule 4B list of additional tariffs due on December 15 is implemented, there doesn’t seem to be much progress on an elusive trade deal… There are about 25/26 days until the tariffs on this list are imposed – smack-bang in the middle of the gift-giving season in the US. I wonder if markets will get a little more jittery once we hit December?’
This follows yesterday’s reports which indicated that mood in Beijing had turned ‘pessimistic’ over a US-China ‘phase one’ trade deal due to US President Donald Trump’s reluctance to roll back tariffs on Chinese goods.
The USD/EUR exchange rate remained unmoved, with investors unsure where to turn as the world’s two largest superpowers fail to make headway on a workable trade deal.
US Dollar (USD) traders will be awaiting today’s release of October’s US Building Permits figure, which is expected to ease from 1.391 million to 1.385 million, while US Housing Starts for the same month are expected to improve.
EUR/USD Exchange Rate Steadies despite Optimism for Eurozone Economy
The Euro (EUR) failed to gain on the ‘Greenback’ today, although Morgan Stanley was optimistic about the Eurozone’s return to health next year.
Hans Redeker, Global Head of Strategy at Morgan Stanley said:
‘Eurozone growth is expected to pick up as US growth starts to slow, benefiting EUR/USD particularly as market expectations for Eurozone growth are fairly low. U.S. growth is likely to slow modestly further into 2020 as fiscal tailwinds fade, while European data may exceed the market’s low bar.’
Meanwhile, the UK’s political developments remain in focus ahead of the 12th December general election, with European markets feeling increasingly optimistic that the Conservatives will further consolidate their lead ahead of the Labour Party.
In European economic news, today will see the release of September’s Eurozone construction output figure, which is expected to rise from -0.46% to 0.7%. As a result, we could see the Euro begin to edge higher on renewed hopes for the bloc’s flagging economy.
EUR/USD Outlook: Could the US Dollar Sink on Gloomy Fed Forecasts?
Euro (EUR) investors will be looking ahead to tomorrow’s release of October’s German Producer Price Index, which is expected to flatline at 0%.
Tomorrow will also see a speech by Philip Lane, the Chief Economist at the European Central Bank (ECB).
Any dovish comments about the Eurozone’s economy could begin to weigh on the EUR/USD exchange rate.
US Dollar (USD) traders, meanwhile, will be paying close attention to tomorrow’s Federal Open Market Committee Minutes.
The EUR/USD exchange rate could begin to edge higher tomorrow if the Federal Reserve’s outlook for the US economy is dovish in tone.