- US Dollar Euro Drops to 0.8537 – Euro US Dollar Hits 1.1760
- Whitehouse Controversies Continue – Concerns Flourish that Trump Won’t Deliver Policy Pledges
- Eurozone Data Disappoints – USD EUR Drops Regardless
The US Dollar to Euro exchange rate has stumbled this morning as concerns grow regarding US President Donald Trump’s ability to push through economic goals like tax reform and infrastructure spending changes.
These concerns have snowballed as of late due to the exodus of various executives from two significant business councils following the Charlottesville riots, signalling continued chaos in the West Wing.
Of notable concern to markets; the Director of the National Economic Council, Gary Cohn, was deemed likely to resign, but has since asserted that he intends on remaining in his position.
As President Trump and the Republican Party lose some support from various political and business allies, investor confidence in their political agenda has, in turn, taken a hit, leaving the ‘Greenback’ unable to capitalise on a Euro currently weakened by disappointing data.
Eurozone Data Disappoints, USD EUR Unable to Capitalise.
Today’s small run of Eurozone reports proved disappointing, with German producer prices rising at their slowest pace in 2017, Destatis revealed.
The year-on-year producer price of industrial products advanced 2.3% in July, down from June’s 2.4% increase and the lowest rise since December 2016.
Month-on-month producer prices did, however, demonstrate a 0.2% increase, up from the previous month’s 0.0% and indeed the forecast of 0.0%.
Additionally, the Eurozone’s current account surplus was revealed to have narrowed in June, with the working-day and seasonally adjusted figure falling to 21.2bn Euros from 30.5bn in May.
Whilst these figures are negative and the Euro has fallen against various majors as a result, the US Dollar remains unable to capitalise on its weakness.
USD EUR Forecast: US Michigan Confidence Survey Could Swing things in the ‘Greenback’s Favour
Whilst that’s all for this week’s notable Eurozone releases, the US Michigan Confidence Survey for August will be released today. The survey assesses consumer confidence in respect to business conditions, personal finances and purchasing power and is one of the foremost indicators of US consumer sentiment.
Currently the survey figure is expected to print at 94, slightly up from the previous’ 93.4. Should this occur then the US Dollar may well be afforded the opportunity it needs to push back against the Euro before the trading week ends.
Notable next week: the German and Eurozone ZEW economic sentiment and current situation surveys for August, US housing figures, a speech from ECB President Mario Draghi, PMI prints for both nations and finally, German GDP figures and US durable goods orders on Friday.
Markets will be watching Draghi’s speech with baited breath for any indication regarding the tapering of the ECB’s quantitative easing programme, though the general atmosphere remains somewhat gloomy following the recent dovish minutes released by the ECB.