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Outrage at Catalonian Arrests Triggers Euro to US Dollar Decline

The Euro has fallen even further against the US Dollar on Friday afternoon.

The EUR/USD exchange rate initially traded in the region of 1.1647, but has since declined to 1.1604.

This is because of US Dollar-supporting data, which has raised hopes of a Federal Reserve interest rate hike in December.

While US non-farm payrolls didn’t increase by as much as forecast, unemployment fell to 4.1% and non-manufacturing activity rose against estimates for a decline.

(First published November 3rd, 2017)

The Euro has posted a minor loss against the US Dollar today, but could bounce back on US disappointment during the afternoon.

  • EUR USD rate slips to 1.1647 – USD EUR trades down at 0.8583
  • Euro declines on fresh Catalonian protests – Former President could face arrest in Belgium
  • US Dollar advances on Trump’s Fed call – Trump’s pick seen as safe option
  • Euro could remain weak until US data comes out – Major US jobs figures incoming

The US Dollar has conversely appreciated, following a market-reassuring announcement from Donald Trump.

Euro Loses Ground on Protests over Catalonian Trials

With little direct data to refer to today, Euro traders have been more focused on yet more turbulence being seen in Catalonia.

After the arrest of a number of deposed Catalan officials on Thursday night, thousands have taken to the streets to protest the decision.

The move has seemingly been taken by the Spanish government to tie up loose ends ahead of regional elections, given that the officials could face lengthy jail sentences if convicted.

They face charges of rebellion and sedition, as well as claims of the misuse of funds.

The head of the ex-Catalonian leadership, former President Carles Puigdemont, was not included in these arrests, as he is currently in Belgium.

It is reported that a European arrest warrant has been issued for Puigdemont, however, which means he may face extradition in the future.

US Dollar Advances after Trump Announces Next Fed Chair

The US Dollar has made stable gains against the Euro today, thanks to an announcement made on Thursday evening by Donald Trump.

At long last, the President finally revealed who he had nominated as the next chair of the Federal Reserve.

Matching with the expectations of economists, Trump chose Jerome Powell, a current member of the US central bank.

This choice has largely maintained the status quo at the Fed, as Powell is expected to continue current Chair Janet Yellen’s policy plan of cautious growth.

It remains to be seen if Powell will bow to pressure from those seeking a less-regulated US financial sector, but for now it is thought that the Fed is in safe hands for the future.

Will EUR/USD Exchange Rate Recover on Mixed Set of US Data?

The Euro has a chance to rise against the US Dollar this afternoon, depending on the outcome of high-impact US data releases.

These economic announcements will consist of the US trade balance result for September, along with non-farm payrolls and unemployment rate stats.

Also out later will be a non-manufacturing activity measure for October.

It is unclear how US Dollar traders will respond to the results, given that forecasts have been decidedly mixed in all fields.

The trade deficit is expected to expand, while a reduction in non-manufacturing activity has also been predicted.

On the more positive side, there are expectations for a major rise in non-farm payrolls, indicating more persons acquiring employment.

After the -33k drop reported in September after a series of hurricanes, forecasts are for a substantial 310k rise in October.

Unemployment is tipped to remain at 4.2% on the month, which may mean that the jobless rate doesn’t factor into USD movement today.

If USD traders are ultimately concerned by a wider trade deficit and slowing economic activity, this could lead to the US Dollar falling and the Euro appreciating in its place.

The day’s only remaining Eurozone news will come this evening, when European Central Bank (ECB) official Benoit Coeure makes a speech.

Current Interbank EUR USD Exchange Rates

At the time of writing, the Euro to US Dollar (EUR USD) exchange rate was trading at 1.1647 and the US Dollar to Euro (USD EUR) exchange rate was trading at 0.8583.