The Euro has made a significant improvement against the US Dollar on Tuesday, having risen by 0.6% against the ‘Buck’ (EUR USD). This comes in the wake of recent US manufacturing data, which turned out worse than expected.
- Euro US Dollar exchange rate rallies after previous US stats – Euro hits 1.12 against US Dollar
- Slovenian unemployment results due shortly – ZEW surveys also incoming
- US Dollar flops overall after manufacturing stats – US inflation stats out later
The Euro has opened trading today on a strong note against the US Dollar, having been solidly boosted in the pairing by August’s falling empire manufacturing result out of the US.
Looking ahead, the high-impact German and Eurozone ZEW survey results are expected out of the Eurozone shortly, while the early afternoon will bring the US’s inflation rate results for July.
The US inflation result could prove particularly significant. If consumer price pressures falter, it would weigh on Federal Reserve inflation expectations and potentially see USD slide further still.
(Last updated August 16th, 2016)
Eurozone Economic News: Euro Exchange Rates Weakened by Data Shortage and Further Greek Drama
The Euro (EUR) has made a lacklustre start to the week, having closed off the previous one on such a strong note.
In comparison to Friday, domestic data has been distinctly lacking, mainly because of the multinational holiday of the Assumption of Mary.
Finland has been one of the relatively few countries to release data today, having put out inflation rate results for July as well as June’s current account figure.
Annual inflation has risen from 0.4% to 0.5%, while the monthly result has dipped from 0% to -0.1%. Making it a positive result overall, the June current account has climbed from -364m to 219m.
Among the other limited Eurozone news has been the announcement that billions more bailout funding has been unlocked for Greece, corresponding with a significant withdrawal of pleas for debt relief from the International Monetary Fund (IMF).
US Dollar on the Rocks against Currency Peers as Concerns Form over Car Debt Situation
The US Dollar (USD) has failed to get off to a strong start to the week, in the wake of prior poor retail sales data.
With no domestic data to refer to yet, investors in the US Dollar have instead been forced to rely on a concerning forecast about car-based debt, made by Bloomberg economist Mark Whitehouse.
Painting a concerning picture of future US economic stability, Whitehouse has said that;
‘consumers appear to be paying for an increasing portion of […] auto purchases with borrowed money. As of June, total household auto debt stood at an estimated $1.1 trillion, according to the Federal Reserve Bank of New York. The prevalence of cars and credit illustrates just how precarious the outlook for the US economy really is’.
Future EUR USD Forecast: Bundesbank Report Imminent, Could the Euro be Boosted by the Outcome?
The next data likely to have an impact on Euro US Dollar exchange rate trading will come from the Eurozone, when German central bank Bundesbank releases its monthly report for August.
Given how last week’s German data exceeded forecasts, hopes are currently high for a hawkish outlook.
From the US, the afternoon will bring with it the NY Empire State manufacturing index for August, as well as the NAHB housing market index result for the same month and the June foreign investment figure.
Respectively, predictions have been for a rise from 0.55 to 3.7 for the NY figure, a minor dip for the housing index and a still-negative amount of foreign bond investment.
However, EUR USD exchange rate movement may be limited ahead of tomorrow and the publication of the latest US inflation figures. If the inflation data shows a reduction in consumer price gains it would weigh on Federal Reserve rate hike expectations, potentially driving the Euro higher against the US Dollar.
Current EUR, USD Exchange Rates
The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.1168 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.8957 today.
