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Will Incoming ECB Speeches Break Current Euro US Dollar Stalemate?


The Euro (EUR) is lingering around the day’s opening levels against the US Dollar (USD) today. This comes after optimistic remarks from European Central Bank (ECB) President Mario Draghi failed to provide lasting support for the EUR USD exchange rate.

  • EUR USD rate remains at 1.06 – Minor USD EUR loss to 0.93
  • Euro trends tightly on Italian industrial stats – Imminent Dutch election continues unnerving traders
  • US Dollar/Euro static on Fed rate hike expectations – Borrowing costs expected to increase
  • Euro rally possible on ECB speeches – US jobs figures ahead

This lack of notable movement in the Euro US Dollar exchange rate is partly due to market uncertainty about the week’s biggest US event – a possible Fed interest rate hike on Wednesday.

In such an event, the US Dollar could be boosted, which would conversely see the Euro slide.

That being said, the potential Fed rate hike may have been factored in so heavily already that the US Dollar is little changed by an actual rate increase. Supporting this view has been Guardian Economics Editor Larry Elliott;

‘The financial markets have already moved on from next week to musing about how many more times the Fed will tighten during the course of 2017. The feeling is that two more rate rises are in prospect’.

The Euro has also been held back against the US Dollar by Italian industrial production figures, which fell by more than forecast.

Additional damage has come from concerns about Wednesday’s Dutch general election, given that it could theoretically see the Eurosceptic PVV party take power and destabilise the Eurozone.

Keeping the US Dollar in check against the Euro, meanwhile, has been the ongoing reaction to the proposed Affordable Healthcare Act (ACA) replacement, much of which has been negative.

Although it has been claimed that ‘nobody will be worse off financially’ under the new system, both Republican and Democrat officials have voiced their doubts about the viability of the much-touted Trump policy.

The Euro could be poised to gain against the US Dollar today on European Central Bank (ECB) speeches, given that four are due over the course of the afternoon.

As well as ECB President Mario Draghi giving a statement, the Euro could also appreciate on remarks from Peter Praet, Sabine Lautenschlaeger and Vitor Constancio if they are sufficiently optimistic.

With no high-impact US data expected today, USD movement could instead come from a positive labour market conditions index on Tuesday, before Wednesday’s major Fed rate decision.

Current EUR USD Interbank Exchange Rates

At the time of writing, the Euro to US Dollar (EUR USD) exchange rate was trading at 1.06 and the US Dollar to Euro (USD EUR) exchange rate was trading at 0.93.