The Euro has expanded its earlier gains against the US Dollar, rising by 0.5% in the pairing. This improvement of the Euro US Dollar exchange rate to 1.0978 has been caused by a dip in the US New York manufacturing index.
The drop to -1 in May represents the first negative posting since Donald Trump assumed office in January, and has disappointed expectations of a 7 point figure.
(First published 12:06, May 15th, 2017)
The Euro has risen by 0.3% against the US Dollar today, but at an exchange rate of 1.0954, EUR USD still remains down from May’s high of 1.1020.
- EUR USD exchange rate rises to 1.0955 – USD EUR trades down at 0.9125
- Euro unsettled by French President’s first day – Will Emmanuel Macron pick Republican Prime Minister?
- US Dollar weakened by ongoing Comey scandal – Trump ‘tapes’ are latest issue in USD-damaging events
- Euro may drop on Eurozone GDP stats – US Dollar slump could worsen on production stats
The Euro’s advance against the US Dollar has mainly been triggered by USD weakness, given that EUR losses have been seen against other regular peers. Uncertainty about Emmanuel Macron, France’s new President, has prevented a full Euro to US Dollar rally.
Macron already faces a difficult task in selecting France’s Prime Minister. Macron may attempt to unify France’s political wings, by appointing a non-centrist figure as PM. According to BBC Paris Correspondent Hugh Schofield, Republican Edouard Philippe is tipped for the post.
If Macron does pick Philippe or another Republican, the Euro could rally as it would imply a unified government under the new President’s leadership.
US Dollar weakness today has been caused by last week’s surprise dismissal of FBI Director James Comey, by Donald Trump.
Trump’s motivation for the ‘termination’ have been called into question, as has the existence of ‘tapes’ of conversations between the two men.
With Republican and Democrat Senate heads calling for such ‘tapes’ to be released, confidence in Trump’s leadership and by extension the US Dollar has slipped further.
Tuesday will bring high-impact Eurozone news, covering Eurozone and Italian GDP growth, as well as a German ZEW sentiment score.
Annual Italian and Eurozone GDP is forecast to slow in the first quarter. The German ZEW score, covering economic sentiment in May, is forecast to rise from 19.5 to 22, but this may not be enough to cancel any negativity from the GDP results.
US data to watch out for this week will include production figures on Tuesday, crude oil measures on Wednesday and jobless claims stats on Thursday.
Monthly industrial production in April is forecast to slow, which may weaken US Dollar demand. Similarly, if Wednesday’s oil stocks rise then the USD could be devalued over fears of lower oil prices for exporters.
Initial US jobless claims are forecast to rise on Thursday, which could cause another late-week USD EUR slump.
Outside of these scheduled announcements, any Comey-related news could influence US Dollar demand. If it looks like Trump will face increasing opposition, then confidence in the President could wane, lowering US Dollar demand in the process.
Given how many leaks the White House has seen since Trump started his tenure, it is not inconceivable that a major USD-damaging leak could take place.
Current Interbank EUR USD Exchange Rates
At the time of writing, the Euro to US Dollar (EUR USD) exchange rate was trading up at 1.0949 and the US Dollar to Euro (USD EUR) exchange rate was trading down at 0.9130.