- Euro retains strength against the odds – Confidence falls in Eurozone after EU Referendum
- Loss recorded against US Dollar – Moderate gains seen elsewhere for single currency
- US Dollar rallies on positive housing data – Significant climb in number of houses built
- Eurozone confidence stat due for July – US to provide mortgaging data
The Euro has lost out by a small amount against the US Dollar recently, though the common currency has actually weathered poor confidence data fairly well of late.
The US Dollar has fared well lately, with gains coming from better-than-expected data relating to the nation’s housing situation.
Eurozone Economic News: Euro Stable Overall after Confidence Slides
In an unusual development, the Euro has managed to hold onto recent gains, in spite of the fact that confidence in the economies of the multinational union has dropped considerably.
This was evident in yesterday morning’s ZEW surveys of economic conditions for July, which fell into negative ranges for both the Eurozone and Germany. In addition, German current conditions also declined from 54.5 to 49.8.
In response to the news, Berenberg Bank Economist Florian Hense said:
‘The first reading of the economy is somewhat in contrast to market developments. When the ECB’s governing council convenes on Thursday for its monetary policy meeting, they will acknowledge that market moves so far have been relatively orderly and sovereign bond yields, particularly in the Eurozone periphery, signal limited contagion risk’.
While investors in the Euro have been fairly unfazed by this latest knock to confidence in the Eurozone, whether the result recorded is a knee-jerk reaction or the first sign of a more prolonged sense of anxiety remains to be seen.
US Dollar Advances Strongly as Housing Stats Exceed Forecasts
The ‘Buck’ has undergone a rapid transformation recently.After starting the week on a low note due to concerns about when and if the Fed will raise the US interest rate, the US currency has since climbed against its peers due to a supportive outcome from yesterday afternoon’s housing results.
In particular, building permits in June rose from 1136k to 1153k on the year, while June’s housing starts, which measure the number of new homes constructed, rose from 1135k to 1189k.
In wider US developments, the Republican Party has opened its convention, during which presumptive nominee Donald Trump is expected to become the de factor runner for the presidency against the Democrat’s Hilary Clinton.
Future EUR, USD Forecast: Eurozone Confidence Flash and US Mortgages Data due Today
Today will unusually see the US’s major domestic data announced before the Eurozone’s, with the day’s major announcement out of the multinational union coming during in the mid-afternoon.
From the US, noon will see the release of the MBA mortgage applications result for July, as well as the MBA 30-year mortgage rate for the same month.
Respectively, forecasts have been for a drop in applications from 7.2% to 1% and a fractional increase in the rate from 3.6% to 3.61%.
The big Eurozone news to watch out for will come in the afternoon and consist of the single currency bloc’s consumer confidence flash for July, which is expected to drop disappointingly from -7.3 to -8.5.
Lesser Eurozone contributions will focus on Italy and Portugal’s current account results, which are due during the morning.
Recent EUR, USD Exchange Rates
The Euro US Dollar (EUR USD) exchange rate has been trending in the region of 1.1020 and the US Dollar Euro (USD EUR) exchange rate has been trending in the region of 0.9077 today.