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EUR/USD Exchange Rate Declines as EU Commission and Council Clash

The Euro has declined against the US Dollar today; this is down to lower trader sentiment about future EU unity.

  • EUR USD rate drops to 1.1784 – USD EUR trades higher at 0.8478
  • Eurozone reform plans panic traders – Rising GDP fails to support Euro
  • US Dollar rises on bold Trump GDP forecast – President predicts 6% growth
  • Major German trade data out Friday – US jobless claims set to rise

The recent US Dollar gains are largely down to Donald Trump, who has had a surprising positive effect on the currency today.

Clash between EU Organisations Drags Euro US Dollar Rate Down

Signs of a possible EU-wide argument on the horizon have damaged the Euro today, with the EUR/USD exchange rate falling.

The issue is between the European Council and the European Commission, which are attempting to maintain overall control of the EU.

A key issue has been the level of EU integration; with the UK leaving in 2019, some remaining EU members have been pushing to tighten bonds between nations.

The idea of a Eurozone wide emergency fund has been a core tenant on these integration plans.

This was suggested by French President Emmanuel Macron, but rejected by the European Commission.

If the two EU bodies can reconcile in the future, the Euro might stage a recovery against the US Dollar.

Even rising Eurozone Q3 GDP has failed to support the Euro today, with the currency dipping in spite of a year-on-year upgrade from 2.4% to 2.6%.

US Dollar Euro Rate Rises on Trump’s Hawkish GDP Outlook

The US Dollar has seen surprising gains today, rising by 0.2% against the Euro and seeing greater advances elsewhere.

This appreciation comes after extraordinary forecasts for future US GDP growth, from none other than President Donald Trump.

In typically bombastic fashion, Trump has been wildly optimistic about future national growth, stating;

‘So we’re at 3.3% GDP. I see no reason why we don’t go to 4%, 5%, and even 6%’.

This figure should be taken with a pinch of salt, given that economists at the Federal Reserve only believe that 2% growth is likely in the years ahead.

Nonetheless, markets remain cautiously optimistic that Trump can deliver at least some of what he promises, so the US Dollar has advanced today.

Will German Trade Stats see Euro US Dollar Rate Close on a High?

This week’s steady stream of major Eurozone data will continue on Friday, with the release of Germany’s trade balance reading for October.

Although the seasonally-adjusted reading isn’t expected to change, a decline in the basic trade balance has been forecast.

The dip from 24.1bn to 21.6bn would still leave Germany with a sizable trade surplus, but could weaken the Euro if there are other market uncertainties at the same time.

Near-term US Dollar movement will be down to this afternoon’s jobless claims readings, covering continuing claim counts as well as new claimants.

Continuing claims are expected to have reduced in late November, but initial claims are on track to have increased in early December.

The initial claims reading is considered more high-impact, so the US Dollar might decline on forecast-matching news.

Current Interbank EUR USD Exchange Rates

At the time of writing, the Euro to US Dollar (EUR USD) exchange rate was trading at 1.1784 and the US Dollar to Euro (USD EUR) exchange rate was trading at 0.8478.