While the Euro has lost some of its recent gains against other currencies, the EUR USD exchange rate has still been the best in over two years today.
- EUR USD rate rises to 1.1647 – USD EUR rate drops to 0.8583
- EUR trades at over two-year best against USD – Continued support given by ECB remarks
- US Dollar drops after Trump news – President shuffles legal team in Russia investigation
- Euro could slide on week of negative German news – Will US Dollar advance on higher GDP?
The Euro has hit another exchange rate high against the US Dollar today, following a strongly supportive European Central Bank (ECB) event.
Euro Advances after ECB-Inspired Volatility
The Euro has made a historic rise against the US Dollar today, posting the best exchange rate since January 2015. The climb to 1.1647 comes after a supportive ECB statement on Thursday.
Speaking after the ECB’s interest rate decision, President Mario Draghi stated that the ECB would discuss quantitative easing in the Autumn. While a simple statement in itself, this raised hopes that the ECB could start policy tightening in the coming months.
Since the initial surge on this news, the Euro has slowed its advance, likely due to excess profit-taking.
US Dollar Tumbles as Trump Shuffles Defence Lawyers
As the investigation into Russian links with the Trump administration continue, the US Dollar has fallen by -0.2% against the Euro.
The drop to 0.8583 makes this the worst exchange rate of the week, where USD EUR losses have been a consistent problem. The pairing opened weekly trading at 0.8726, only to progressively weaken on political news.
The latest damaging development from the White House has been that Donald Trump is changing his legal team.
This is in the context of an investigation headed by Robert Mueller, which aims to see if there are Russian links to the 2016 Presidential election.
News of a reshuffle by Trump has panicked traders, as it implies that the President could be becoming unnerved by the possibility of the investigation bearing fruit.
EUR USD Weekly Forecast: Euro Decline Possible on Poor German Data
German ecostats will play a strong role in next week’s Euro movement, as high-impact announcements are due over the course of the week.
Starting off movement will be Monday’s manufacturing and services PMIs for July. Both in Germany and the Eurozone, sector activity is forecast to slow, which may bring some early Euro weakness.
On Tuesday, IFO measures of German economic confidence are also forecast to show declines, which could further weaken the Euro.
Continuing on this trend, another German confidence measure by GfK is also expected to show a decline on Thursday. Rounding off what could be a poor week of Euro trading, Friday will bring German inflation and Eurozone confidence stats. In both cases, drops are predicted.
Projections for US data next week have been much more optimistic. The Federal Reserve is expected to leave interest rates at 1.25% on Wednesday, but durable goods orders are predicted to increase on Thursday.
Closing the week on another potential dose of good news, Friday’s US GDP figure for Q2 is also forecast to show a rise. Higher GDP equates to a stronger economy, which raises the chances of a Fed interest rate hike in December.
Current Interbank EUR USD Exchange Rates
At the time of writing, the Euro to US Dollar (EUR USD) exchange rate was trading at 1.1647 and the US Dollar to Euro (USD EUR) exchange rate was trading at 0.8583.