The US Dollar to Euro (USD/EUR) exchange rate edged higher by around 0.19% on Friday morning.
In a delayed reaction to the comparatively positive US labour market data on Thursday, the US Dollar strengthened versus the majority of its most traded currency rivals. The gains have been somewhat laboured, however, amid uncertainty regarding the Federal Reserve’s policy outlook.
The single currency, meanwhile, is generally holding steady versus most of its major peers. A fractional uptrend can be attributed to the prospect of much improved Euro-area growth as the European Central Bank (ECB) intend to continue with the full program of quantitative easing.
The US Dollar to Euro (USD/EUR) exchange rate is currently trending in the region of 0.8785.
Yesterday…
The US Dollar to Euro (USD/EUR) exchange rate softened by around -0.12% during Thursday’s European session.
With little to celebrate over the past few months amid a succession of disappointing domestic data publications, the US Dollar dived versus most of its major peers. Thursday has seen little change as relatively unremarkable labour market data wasn’t enough to provoke increased demand for the US asset.
The Euro, conversely, strengthened versus nearly all of its major peers despite the fact that Greece has returned to recession. The turmoil in Greece has been overshadowed by positive sentiment towards the European Central Bank (ECB) after quantitative easing stoked positive Euro-area growth.
The US Dollar to Euro (USD/EUR) exchange rate is currently trending in the region of 0.8799.
US Dollar (USD) Exchange Rate Forecast to Soften versus the Pound as the Market Struggles to Digest Stagnant Retail Sales
US jobs data printed relatively positively on Thursday, but the results weren’t spectacular enough to micrify concerns mounting from a long succession of disappointing domestic data results. Wednesday’s Advance Retail Sales came in at 0.0% in April, leading many to speculate that the drop in consumer confidence highlights negative sentiment towards US economic momentum.
In the week ending May 2nd, US Continuing Claims held at 2,229,000 despite expectations of a rise to 2,233,000. In the week ending May 9th, Initial Jobless Claims saw 264,000 new claimants; slightly below the median market forecast figure of 273,000. ‘The fundamentals are sound. The underlying momentum in job growth remains solid,’ Federal Reserve Bank of San Francisco President John Williams said in a speech in New York on Tuesday.
The US Dollar to Euro (USD/EUR) exchange rate has fallen to a low of 0.8736 today.
Euro (EUR) Exchange Rate Forecast to Advance Versus Sterling as QE Bounce Eases Deflation Concerns
Greece’s struggles have turned from bad to worse as the nation was shown to have returned to recession in the first quarter of the year. Having tapped into emergency funds to repay the International Monetary Fund (IMF) €750 million of its extensive debt, the cash-strapped nation is now on thin ice. Athens seems unable to find a solution that will please both the Greek citizens and creditors, and looks incredibly likely to default on the next big loan repayment due.
Concerns over Greece have eased somewhat, however, as recent positive results from Euro-area growth data fuelled speculation that the Eurozone wouldn’t collapse if Greece was to leave. The positive growth, which incidentally saw the currency bloc outperform both the UK and the US in the first-quarter, has been linked with the massive injection of liquidity from the ECB. In addition, quantitative easing looks to be having a positive effect on inflation as the currency bloc moves away from deflationary territory.
US Dollar to Euro (USD/EUR) Exchange Rate Forecast to Hold Gains with a Lack of Influential Data to Provoke Changes
Given the absence of European data, and with little by way of influential US data to come, the US Dollar to Euro (USD/EUR) exchange rate is likely to hold gains for the remainder of Thursday’s European session.
Friday is likely to see EUR/USD volatility with the University of Michigan Confidence report due for publication. If the Advance Retail Sales are anything to go by, we could see confidence fall below forecast.
The US Dollar to Euro (USD/EUR) exchange rate reached a high of 0.8814 today.
