The Euro may slump against the US Dollar today, based on forecasts for Eurozone PMI figures.
- EUR USD traded between 1.07 and 1.08 yesterday – USD EUR limited to 0.92 range
- Euro losses possible on PMI figures – German confidence stats due Monday
- US orders forecast to slow today – Fed speeches could cause lasting movement
- Will Euro crash on Brexit trigger? – US Q4 growth figures out next week
To recap yesterday’s trading, the Euro gradually fell against the US Dollar due to falling German and French confidence, despite the overall Eurozone confidence score improving.
Today, the Euro US Dollar exchange rate could drop to fresh weekly lows if German and Eurozone PMI flashes match with forecasts.
Estimates are for falling composite and manufacturing scores, with a slight rise in the German services figure not expected to outweigh such negative results.
Looking further ahead, the Euro may have a strong start to next week if March’s German Ifo confidence figures rise. Additional support could come from Thursday’s Eurozone-wide confidence scores, if the Euro hasn’t been damaged by Brexit.
UK Prime Minister Theresa May is expected to trigger Article 50 to leave the EU on Wednesday. As well as expected Pound damage, this event could also cause a Euro to US Dollar drop.
While it did rise against the Euro on Thursday, the US Dollar’s progress was mainly due to Euro weakness; domestic troubles were still prevalent in the US.
US news was uncertain, opening with Fed Chair Janet Yellen’s speech. Instead of discussing monetary policy, however, Yellen caused disappointment by failing to mention the ‘hot topic’.
New home sales rose above forecasts, but the good news was countered by March’s initial jobless claims rising by more-than-expected.
Today’s main US Dollar influencers will be Fed speeches from Charles Evans and James Bullard, along with the durable goods orders figure for February.
With Yellen’s speech being a non-event, these remarks from lesser policymakers could still shift the USD if they point to a near-term interest rate hike.
Less supportively, goods orders are forecast to slow from 1.8% to 1.2%, which may drain the US Dollar’s value.
Next week’s main US news is due on Thursday, covering finalised Q4 GDP growth. As with today’s orders, a slowdown is expected, from 3.5% to 2% on the quarter in this case.
Given how loudly Donald Trump has been touting the US economy, such a slowdown may cause a US Dollar drop as all future GDP records will cover his administration’s work, raising the need for positive figures.
Recent EUR USD Interbank Exchange Rates
At the time of writing, the Euro to US Dollar (EUR USD) exchange rate was trading at 1.07 and the US Dollar to Euro (USD EUR) exchange rate was trading at 0.92.