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Euro to US Dollar Exchange Rate Climbs as Trump’s Spending Plans Spark Concern

The Euro has built upon earlier gains against the US Dollar to rise by 0.6% today, following a flurry of policy statements from US President Donald Trump.

While Trump has expanded on his promises to improve the nation’s roadways and bridges, more issue has been generated by the pledge to raise defence spending by 10% and make up the difference by cutting budgets in other State departments.

This plan to ‘do more with less’ and ‘make the government lean and accountable’ has lowered confidence considerably, given that maintaining the balance with these tax plans is largely dependent on a strong and sustained period of economic growth.

[First Published 10:51, February 17th, 2017]

The Euro has climbed by 0.4% against the US Dollar today following the release of supportive Eurozone confidence data – but with inflation data still to be published, are more EUR USD gains ahead?

These figures have shown a range of measures, barring consumer confidence, rise in February, including a services jump from 12.8 to 13.8 and a climb in business confidence from 0.76 to 0.82.

The services result was the most impressive since 2007.

Less positively, Greek consumer and business confidence dipped in February, putting the notion of a recovering economy in Greek back into question.

The US Dollar’s losses against the Euro today have followed the latest Trump developments, including the President’s supposed plans for nationwide tax reform, which have raised more than a few concerns.

As well as still being half-formed compared to other Trump policies, the tax plans have also been criticised for pointing towards low-income families being saddled with rising taxes instead of the promised tax cuts.

Other issues originating from the White House have included officials refusing access to specific news outlets to talks on Friday.

The news was followed by Trump’s announcement that he could not attend the traditional correspondents’ dinner, presumably due to his outright hostility towards news companies that would be in attendance.

These developments have only amplified fears that Trump’s administration may be looking to influence the way its actions are reported, something the flows contrary to previous White House-media interactions.

Tomorrow’s Eurozone data is not expected to be as impactful as today’s, but the incoming GDP and inflation figures could still cause movement ahead of the week’s major releases.

Tuesday morning will open with French GDP figures for Q4, which are expected to show a rise in finalised growth on the quarter and the year.

Other Eurozone news includes February’s, inflation numbers for France and Italy. In the latter case, improvements are forecast on the month and the year.

US durable goods orders data, pending home sales stats and a speech from Fed official Robert Kaplan may also influence EUR/USD trading.

Current Interbank Exchange Rates

At the time of writing, the Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.05 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.94 today.