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Euro US Dollar Exchange Rate Rises as Eurogroup Reach Greek Debt Agreement

  • EUR USD rate at 1.06 on Monday – USD EUR trends at 0.94
  • Euro demand increases on Greek debt deal – 11th Hour talks see reforms agreed on
  • US Dollar damaged by Trump-based turmoil – Bizarre ‘Sweden incident’ worsens perceptions of Trump

The Euro has staged a late-day recovery against the US Dollar today, having been pushed up by the news that Greece and its creditors have come to an agreement on the last day of a self-imposed deadline.

While some have been expressing concern that this will just be the start of another round of austerity measures and diplomatic wrangling, Greek officials have been optimistic about this last-minute economic save.

US news has weakened the US Dollar today, with the main focus being on President Trump’s rally in Florida over the weekend.

Trump notably referenced an event ‘last night in Sweden’, which was assumed to refer a terror attack. No such attacks took place and while Trump later clarified that this was referring to massive Swedish problems with migrants, it was revealed that the source, a Fox News report, had been debunked.

Outside of these political developments, Euro demand was dented when the Eurozone consumer confidence flash for February worsened by more than expected from -4.8 to -6.2.

(Last updated January 20th PM, 2017)

The main events to take away from last week’s Euro US Dollar exchange rate movement were that the Euro was continually weakened by the ongoing Greek debt crisis.

With economists and officials alike forecasting that the coming Monday’s deadline would not be met with an agreement, Euro investors repeatedly moved away, triggering devaluations.

European Commissioner Pierre Moscovici stressed that there were only a few issues to iron out, but the prevailing sentiment was that the deadline would be missed and negotiations would come in danger of being politically coloured by incoming Dutch and French elections.

US Dollar-damaging news came directly and indirectly from Donald Trump; as well as controversially moving away from a two-state solution on the Israeli-Palestinian conflict, Trump also embarked on a lengthy and impromptu press conference during which he attacked the media for producing ‘fake news’.

USD investors were further alarmed when National Security Advisor Michael Flynn was forced to resign, having illegally spoken to Russian officials about sanctions. This cabinet setback was followed by the withdrawal of Labour Secretary pick Andrew Puzder from the confirmation process due to signs he would not make it to office.

During the coming week, the Euro is expected to slide if no Greek debt deal is reached on Monday, though a surprise agreement later in the week could restore confidence.

A drop is forecast for the Eurozone consumer confidence flash, while a German manufacturing PMI drop is also forecast.

Sticking with Germany, the February Ifo business climate score is expected to dip while no change is expected from the GfK confidence measure.

Strong US Dollar gains are expected if Trump reveals his vaunted tax plans, while more concretely PMI figures are due along with home sales figures and Fed meeting minutes.

Closing the week will be new home sales, forecast to rise in January.

Recent EUR USD Interbank Exchange Rates

At the time of writing, the Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.06 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.94.