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Euro to US Dollar Exchange Rate Advances after Mixed Job Data

The Euro has advanced against the US Dollar by 0.3% today, following the release of US jobs figures for May. The JOLTs job openings figure, which measures vacancies, dropped from around 5.96m to 5.66m. This was much lower than the forecast fall to 5.95m.

This US Dollar-unsettling news came alongside data showing rising numbers of hirings during the month, up to 5.5m. Based on historical stats, this was a drop from the best level of vacancies, but around the highest number of hirings on record.

After this mixed data, the Euro rose to an exchange rate of 1.1428 against the US Dollar.

(First published 09:39, July 11th, 2017)

The Euro has traded in a narrow range against the US Dollar today, in spite of a strong economic announcement from Italy.

  • EUR USD rate flat at 1.1394 – USD EUR rate trades around 0.8773
  • Euro unchanged by strong Italian production stats – Eurogroup meeting raises prospects of future bailout rule change
  • US Dollar advances on hawkish Fed statement – Odds rise of third 2017 US interest rate hike
  • Euro recovery possible on industrial figures – US rate hike forecasts could be pushed back by further Fed comments

While the Euro has been close against the US Dollar recently, it is still trading close to the best pairing rate in over a year.

Euro Trades Tightly despite Forecast-Beating Italian Industrial Figures

The Euro has failed to advance against the US Dollar today, instead trading at a rate of 1.1395 due to trader uncertainty.

On the plus side, Italy’s industrial production results for May have shown a substantial rise above forecasts, both on the month and the year.

This has failed to trigger a surge in Euro trading, however, with Monday’s Eurogroup meeting instead holding back the single currency.

Commenting on the recent winding down of two Italian banks, Dutch Minister of Finance Jeroen Dijsselbloem has stated that this could lead to changing EU rules on state aid.

Such an idea raises the prospect of the Eurozone incurring high debts if its nations decide to use state funds to bail out companies, which has alarmed traders.

US Dollar Rises on Hawkish Outlook from Fed’s Williams

The latest US news has come from the Federal Reserve, with Fed official John Williams stating that he still sees one more US interest rate hike coming this year.

Considered as a neutral member of the Fed, this remark from Williams has raised hopes that a rate hike could come by December, or earlier.

There was a caveat, however, with Williams stressing that if inflation failed to rise rapidly in the coming months, the future rate of interest rate hikes may instead slow.

Commenting on Williams’ remarks has been Masafumi Yamamoto of Mizuho Securities;

‘This is supporting the [US] Dollar as a positive factor, and limiting its downside at the moment. I think [Fed Chair] Yellen will confirm that rate hikes are coming, and that balance sheet shrinkage will come’.

EUR USD Forecast: Euro Rally Possible on Future Industrial Stats

The Euro has a chance to break free from its close trading against the US Dollar when Wednesday’s Eurozone-wide industrial production figures come out. These are predicted to show significant growth on the month and the year in May, which could be enough to push the EUR USD exchange rate up.

The next big US news will come today,  consisting of more remarks from Fed officials Lael Brainard and Neel Kashkari. Both have historically been considered policy ‘doves’, so they may devalue the US Dollar with cautious comments.

Given that both Brainard and Kashkari are voting members of the Federal Open Market Committee (FOMC) this year and Williams is not, their comments may have a greater impact that Williams’ earlier statement.

Current Interbank EUR USD Exchange Rates

At the time of writing, the Euro US Dollar (EUR USD) exchange rate was trading at 1.1394 and the US Dollar to Euro (USD EUR) exchange rate was trading at 0.8774.