A combination of poor Eurozone data and strong US stats have dragged the Euro down by -0.4% against the US Dollar today.
In the former case, the Eurozone composite PMI for April (which measures overall economic activity) has shown a slowdown.
On the other side, the US unemployment rate has fallen to 3.9%, the lowest level in 17 years.
Respectively, these results have lowered hopes for imminent Eurozone monetary policy change and boosted the odds of a June Fed interest rate hike.
(Last updated 4th May, 2018)
Mixed US PMI stats have kept the Euro to US Dollar (EUR/USD) exchange rate positive on the afternoon of 3rd May.
The Euro has continued to trade favourably after analytics company ISM reported a slowdown in US non-manufacturing activity in April.
Although data company Markit printed higher finalised PMI readings in April, this has failed to prevent EUR/USD gains.
(First published 3rd May, 2018)
Fears over US Trade War Enable Euro to US Dollar Exchange Rate Rise
The Euro to US Dollar (EUR/USD) exchange rate has risen by 0.4% today, although this is mainly down to US Dollar (USD) weakness.
The latest Eurozone news has been negative, with April’s preliminary inflation rate figures being downgraded for base and core annual readings.
The finalised results may show growth in the single currency bloc, but for now these estimates have been particularly poor.
Euro to US Dollar (EUR/USD) Exchange Rate Gains Tempered by EU Trade War Warning
The Euro (EUR) has firmed against the US Dollar (USD) today, but has been prevented from making further gains by a warning about US protectionism.
The European Commission has recently cautioned that;
‘Europe’s real economy would not remain immune to abrupt market corrections.
‘The combination of a pro-cyclical fiscal stance and inward-looking trade policies presents a dangerous nexus’.
US Dollar to Euro Exchange Rate Declines as China Raises Stakes in Trade War
Today’s US Dollar to Euro (USD/EUR) exchange rate drop is down to China imposing a tariff against US soybean exporters in the ongoing trade war.
It is reported that Chinese importers have ceased to buy soybeans from the US, while purchases in other nations are continuing unimpeded.
This is down to the Chinese government imposing tariffs which have made continued trade of this agricultural product nonviable.
The tariff was first proposed in April, but US farmers were holding out for a deal that would prevent the charges being put into action.
These USD/EUR exchange rate losses have come despite positive signals from the latest Federal Reserve monetary policy meeting.
Fed officials predicted that inflation will near the 2% target range ‘over the medium term’, which has raised hopes that there will be a June interest rate hike.
Euro to US Dollar Forecast: Will Eurozone Retail Sales Growth Push EUR/USD Exchange Rate Higher?
The Euro (EUR) might be able to further its advantage against the US Dollar (USD) on 4th May, although this is dependent on US data releases missing forecasts.
The Eurozone composite PMI for April isn’t expected to show any overall change, so the Euro could be unaffected by the data.
More positively, retail sales stats for March are predicted to show growth for the monthly and year-on-year readings which may extend EUR/USD gains.
4th May will also bring a pair of high-impact US data releases which may cause a US Dollar to Euro (USD/EUR) exchange rate rally.
These will be April’s unemployment rate and change in non-farm payrolls figures; lower unemployment is expected along with more jobs added to the US economy.
Coupled with optimism from Federal Reserve officials, such results could raise hopes for a June interest rate hike and trigger a USD/EUR exchange rate recovery.