- Single currency slumps against peers after US developments – Losses thought to stem from Fed interest rate hike speculation
- Eurozone data limited so far – Low impact French and German contributions published
- US Dollar similarly struggling – Fed remains aloof about next rate hike possibilities
- Eurozone GDP stats beat forecasts – US consumer credit results out later
Although the Eurozone’s GDP figures for the first quarter were positively revised, the EUR/USD exchange rate was little changed on the day’s opening levels.
Upbeat German Industrial Production data also did little to support the common currency. Output was shown to have increased by 0.8% on the month and 1.2% on the year.
The Euro also slid against the Pound during the European session despite ongoing EU-Referendum related concerns.
EUR/USD was trending in the region of 1.1374 while EUR/GBP was trending in the region of 0.7797
(Previously updated 09:30 07/06/2016)
The Euro (EUR) has been in an undesirable state overall today, owing to the lack of recent support offered to the single currency by domestic and foreign circumstances.
The US Dollar (USD) has fared little better than its peer, having been laid low by continually nebulous chances of the Fed raising the national interest rate in the short-term.
Eurozone Economic News Fails to Support EUR/USD Exchange Rate
The Euro has been an unstable option for investors today, having recorded losses of -0.3% against the New Zealand Dollar (EUR/NZD), -0.5% against Pound Sterling (EUR/GBP) and -0.8% against the Australian Dollar (EUR/AUD). Against the US Dollar (EUR/USD), the common currency has been virtually flat.
These latest Euro movements are largely a symptom of the domestic situation on the whole; data from the Eurozone of late has been low-impact and mixed in its outlook.
Finland’s trade balance for April has shown a slight reduction of the current deficit, while Germany’s industrial production results for the same month have risen from -1.1% to 0.8%.
Less supportive has been France’s trade balance data for April, which has shown a deficit expansion from -4.2bn to -5.2bn.
US Dollar (USD) Drops as Fed Rate Hike Bets get Linked to ‘Brexit’ Odds
The appeal of the US Dollar has taken a real hit recently owing to the latest speech on the national interest rate made by Fed chair Janet Yellen.
Speaking yesterday, Yellen did not completely rule out a near-term interest rate hike, but notably said of the EU Referendum vote:
‘The uncertainties are sizable, and progress toward our goals and, by implication, the appropriate stance of monetary policy, will depend on how these uncertainties evolve’.
Such a statement puts the UK in a unique position now, as in addition to US domestic data serving to sway the Fed, it seems as though ‘Brexit’ polls may also have the deciding say on whether a Fed rate hike does or doesn’t take place in June.
The US Dollar has fallen by a marginal amount against the Euro (USD/EUR) today and has additionally dropped by -0.5% against Pound Sterling (USD/GBP) and by -0.9% against the Australian Dollar (USD/AUD).
Future EUR, USD Forecast: Eurozone Finalised GDP Stats and US Credit Data Ahead
The next Eurozone ecostats of note will be out shortly, in the form of the finalised Q1 GDP results.
As of writing, forecasts have been for no change at 0.5% on the quarter and 1.5% on the year.
From the US, input will come later on this evening from the outcome of the April consumer credit printing, which is forecast to show a shift downwards from $29.674bn to $18.000bn
Current EUR, USD Exchange Rates
The Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1362 and the US Dollar to Euro (USD/EUR) exchange rate was trending in the region of 0.8804 today.