- EUR USD rate bounces back after Eurozone data analysis – Sentiment rises after small drop in German confidence
- US Dollar strengthens on Fed Comments at Jackson Hole – Fed’s Kaplan hints at early rate hike
- German confidence data out imminently – Further Fed remarks likely before Yellen speech
The Euro has managed to spring back against the US Dollar over the course of the afternoon, having steadily climbed in the exchange rate on the back of a more positive look at the earlier German Ifo confidence results. While losses were recorded, these were relatively minor in the long-run, which resulted in a gradual appreciation for the Euro.
The US Dollar has made cautious positive movement over the course of the afternoon, with the Jackson Hole Symposium already generating positive movement for the ‘Buck’. Most notably, Fed official Robert Kaplan has implied that a September interest rate hike could be on the way, though it is worth stressing that many more Fed speeches are likely before the main event of Fed Chair Janet Yellen’s comments during Friday afternoon.
The next Eurozone data will consist of early German GfK consumer confidence data for September tomorrow morning, which has been forecast to dip from 10 points to 9.9. For the US, the next planned announcement will come over tomorrow afternoon when the Q2 second estimate for the GDP growth rate comes in; this is expected to rise on the quarter.
(Last updated August 25th, 2016)
US Dollar exchange rates have been similarly low overall, on account of uncertainty after recent housing data. The next US data will consist of positively forecast durable goods orders results for July.
Eurozone Economic News: Euro Trading Unsettled by Weak Spanish and German Data
As with Wednesday, the single currency has made limited positive movement against its peers today, with a 0.2% advance against the US Dollar (EUR USD) to 1.12 being the best performing pairing.
This comes in the wake of Spanish and German data; in Spain’s case, the Q2 finalised GDP growth rate fell on the year from 3.4% to 3.2%, though the quarterly figure remained at 0.8% instead of dipping to 0.7% as forecast.
Germany brought more unexpected negativity, when the Ifo business climate, current conditions and expectations results for August fell on the month instead of rising as expected.
Remarking on the news, Ifo President Professor Dr Clemens Fuest said;
‘Assessments of the current business situation were downwardly revised slightly, but remained at a very good level. Business expectations, by contrast, improved significantly. In line with these developments, service providers once again plan to recruit more staff’.
US Dollar Exchange Rate Losses Seen ahead of Jackson Hole Symposium Start
US Dollar rate movement has been similarly poor in line with the Euro recently, owing to investor uncertainty ahead of August’s biggest Fed-related event.
The latest US data has concerned existing home sales in July, which fell on the month by -3.2%, compared to a previous 1.1% rise.
Other US news has focused on domestic inventories of crude oil and gasoline, both of which have risen to higher levels than forecast.
In the case of crude oil, this has served to lower the price of the commodity on global markets, which has weakened the US Dollar by extension due to lower prices when exporting the resource.
Future EUR USD Forecast: US Dollar could Stage Recovery on Forecast Rise for July Orders
The next major data to affect the EUR USD pairing will come from Germany, when the GfK consumer confidence result for September is announced tomorrow morning. This has been forecast to drop fractionally.
From the US, news that may induce a USD rally is expected over the afternoon, where the July durable goods orders result will be announced. This is predicted to rise from -4% to 3.1%, which may induce a large amount of investment in the US currency ahead of the later opening of the Jackson Hole Symposium.
Current EUR, USD Exchange Rates
The Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.1287 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.8862 today.
