The US Dollar to Euro (USD/EUR) exchange rate climbed on Friday morning ahead of University of Michigan Consumer Confidence ecostats, while the US Dollar to Pound Sterling (USD/GBP) exchange rate remained in a narrow range ahead of UK Construction Output stats.
The US Dollar (USD) exchange rate managed to climb against the Pound Sterling (USD/GBP), Euro (USD/EUR) and Canadian Dollar (USD/CAD) as investors awaited the highly influential US Advance Retail Sales stat due out later in the session.
Euro (EUR) Exchange Rate Drops as Greek Negotiations Continue
The Euro (EUR) exchange rate was offered little support on Thursday as Greek negotiations continued to disappoint and drag on. With no resolution after five months of negotiations, it’s hard for many investors to remain optimistic about a solid deal being made in the near future despite mounds of positivity from Greece.
Greek Prime Minister Alexis Tsipras commented on the situation after meeting with Eurozone financial heads in Brussels on Wednesday, saying: ‘We decided to intensify efforts to resolve the differences that remain and to move towards a solution. The European leaders realised that we must offer a viable solution and the change for Greece to return to growth.’
With only Eurozone Industrial Production data due out on Friday, the Euro (EUR) exchange rate is left to be extremely sensitive to developments in Greece.
UPDATE: The US Dollar (USD) exchange rate was able to jump by +0.68% on Thursday after the European Council President Donald Tusk stated that a deal between Greece and it’s creditors needs to be made now.
Tusk stated: ‘It is very obvious that we need decisions, not negotiations. There is no more time for gambling. The day is coming, I’m afraid, that someone says that the game is over.’
Unless a deal is made in the near future, it appears as if the plug will be pulled on negotiations.
Additionally, the International Monetary Fund (IMF) pulled out its negotiators on Thursday, citing that little progress had been made.
IMF spokesperson Gerry Rice stated: ‘The ball is very much in Greece’s court. There are major differences between us in most key areas. There has been no progress in narrowing these differences recently.’
The Euro to Pound Sterling (EUR/GBP) exchange rate is trending in the region of 0.7252.
The Euro to Canadian Dollar (EUR/CAD) exchange rate is trending at 1.3801.
The Euro to US Dollar (EUR/USD) exchange rate is trending in the region of 1.1214.
Canadian Dollar (CAD) Exchange Rate Forecast – Oil Confidence Drops
The Canadian Dollar (CAD) exchange rate has experienced an extremely quiet week for movement by way of domestic data, instead fluctuating on macroeconomic developments and oil prices.
Society Generale commented: ‘A lot of the FX market is blindly following the oil price, not least because a year ago the price was USD 94 and the forecast for Q2 2015 was for little change.’
Earlier in the week, oil had been rallying and pulled the Canadian Dollar (CAD) exchange rate up with it.
Industry expert Rahim Madhavji commented: ‘Rising commodity prices and an improving domestic economic picture have helped to push the Canadian Dollar higher along with some broad-based US Dollar weakness.’
However, the price slump in the North Seas pressured confidence levels to an all-time low on Thursday with a whole host of projects being decommissioned. The survey, which began in 2004, saw only 7% of respondents more confident than they were a year ago while a massive 76% felt less confident than they did this time last year.
Industry expert Uisdean Vass commented: ‘The UK oil and gas sector is going through a regulatory and fiscal transition at blistering pace and… companies in the sector are understandably increasingly concerned about how they will be affected. Decommissioning is the bittersweet positive in the survey. Academics have been predicting an imminent spike in decommissioning for years, but that spike is not well and truly upon us.’
‘Decommissioning is not driven by oil price or demand and could be very important in maintaining the value of activity in the North Sea – but the inevitable downside is that is hastens the decline of offshore exploration and production.’
The Canadian Dollar to Pound Sterling (CAD/GBP) exchange rate is trending in the region of 0.5256.
The Canadian Dollar to US Dollar (CAD/USD) exchange rate is trending in the region of 0.8125.
The Canadian Dollar to Euro (CAD/EUR) exchange rate is trending in the region of 0.7252.
Pound Sterling (GBP) Exchange Rate Offered Support from RICS House Price Balance
The UK economy printed its latest House Price Balance on Thursday and the data showed a rise from 32% to 34% in May, a little shy of the 36% forecast. The figure was a nine-month high and is thought to be the result of the Conservative Party’s general election win in May. Political uncertainty had weighed significantly on the Pound ahead of the event and a stable government was able to boost confidence in some areas of the economy.
RICS economist Simon Rubinson commented: ‘It is hardly surprising that prices across much of the country and continuing to be squeezed higher with property set to become ever more unaffordable.’
The Pound Sterling to US Dollar (GBP/USD) exchange rate is trending at 1.54720.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is trending in the region of 1.9042.
The Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the vicinity of 1.3800.
US Dollar (USD) Exchange Rate Forecast: US Advance Retail Sales fall in line with Predictions
The US Dollar (USD) has been trending lower in the past few days after last week’s US Change in Non-Farm Payrolls rally and as economists and investors speculate about the Federal Reserve’s interest rate hike timeframe.
However, both Thursday and Friday are forecast to be influential days for the US Dollar (USD) exchange rate, with the release of the US Advance Retail Sales and University of Michigan Confidence data on Thursday and Friday respectively.
RBS stated: ‘US rates have risen to new cyclical highs as expectations or a first hike later this year have firmed, this should reassert strength in the USD. US retail sales on Thursday may help reaffirm confidence in the US recovery.’
The US Advance Retail Sales stat came in at 1.2% in May, in line with forecasts.
The US Dollar to Canadian Dollar (USD/CAD) exchange rate is trending in the region of 1.2309.
The US Dollar to Pound Sterling (USD/GBP) exchange rate is trending in the region of 0.6467.
The US Dollar to Euro (USD/EUR) exchange rate is trending in the region of 0.8927.
