Euro to US Dollar Exchange Rate Fails to Hold Recovery despite US Dollar Weakness
On Tuesday evening, the Euro to US Dollar (EUR/USD) exchange rate recovered – but its recovery was short-lived. The pair was sliding again today on persisting Eurozone growth concerns, despite fresh US political jitters as an impeachment inquiry on US President Donald Trump began.
Following last week’s tumble from the level of 1.1080 to 1.1019, EUR/USD has seen narrower movement this week so far.
EUR/USD briefly recovered from early-week losses yesterday evening, but today the pair was sliding again. At the time of writing, EUR/USD was trending near the level of 1.1000.
US Dollar (USD) investors calmed following news that a formal impeachment inquiry into US President Donald Trump was beginning, helping it to recover some ground today.
Euro (EUR) Exchange Rates Remain Unappealing amid Eurozone Data
While today’s French consumer confidence data from September beat forecasts, rising to 104 rather than the expected 102, this was not enough to make the (EUR) Euro appealing today.
The shared currency has been tumbling on rising fears regarding the health of Germany’s economy and the Eurozone overall, as this week’s German stats have continued to indicate that the bloc’s biggest economy is in recession.
Tuesday’s German business confidence data from Ifo was a little better than expected in some key prints, but the expectations figure was even worse than forecast.
It worsened concerns that Germany’s economic downturn still had further to go. Amid signs that it was having a negative impact on German services sectors and the Eurozone economy overall, the news was highly concerning to investors.
According to Chris Scicluna, Head of Economic Research at Daiwa Capital Markets London:
‘The outlook index is still pretty dire and while current conditions on the Ifo index showed an improvement, it is still pretty weak,’
US Dollar (USD) Exchange Rates Recover as Markets Digest Impeachment News
During Tuesday’s American session, the US Democratic Party announced a decision to begin a formal impeachment inquiry into US President Donald Trump.
House Democrats are expected to begin the impeachment inquiry today, after House Speaker Nancy Pelosi accused Trump of looking to Ukraine to interfere with the upcoming 2020 Presidential Elections.
It follows months of Pelosi resisting calls to begin an impeachment inquiry. The US-Ukraine controversy saw favour of impeachment quickly gather steam.
However, even if the Democratic Party votes for impeachment in the House of Congress where it has a majority, the Senate is still majority Republican.
This means many analysts see it as unlikely that Trump will be removed from office. As a result, US Dollar weakness was ultimately limited.
Euro to US Dollar (EUR/USD) Exchange Rate Investors Anticipate US Growth and Inflation Data
The US Dollar could still record gains against the Euro this week despite impeachment jitters, if upcoming key US data impresses investors.
Thursday will see the publication of possibly the week’s most notable ecostats, US Gross Domestic Product (GDP) growth rate results.
US growth is projected to have slowed to just 2.0% quarter-on-quarter in Q2, so if the final result comes in higher than expected it could lead to fresh US Dollar gains.
US wholesale inventories data could also prove influential.
Following tomorrow morning’s German consumer confidence data, the rest of the week’s notable Eurozone stats will be published on Friday.
Overall Eurozone confidence figures will be published, and these as well as US PCE inflation figures could cause Euro to US Dollar (EUR/USD) exchange rate movement on Friday.