EUR/USD Exchange Rate Steadies Following Dovish Building Permits Data
The Euro US Dollar (EUR/USD) exchange rate steadied today, leaving the pair fluctuating around $1.123.
The US Dollar (USD) steadied against the Euro (EUR) today following yesterday’s poor US housing starts figures for June.
These fell to a worse-than-expected 1.253m, leaving some US traders jittery.
US building permits figures for June also failed to meet expectations, falling from 1.299, to 1.220m.
Chris Rupkey, a Chief Economist at MUFG, said:
‘Residential housing construction is one of the leading indicators of a recession, and while construction activity isn’t dropping precipitously, housing is stuck in a rut. If the Fed thinks rate cuts are going to send housing construction up like a rocket, they better think again.’
These figures left US markets feeling jittery as they have further heightened fears that the Federal Reserve could take a more aggressive stance on monetary policy going forward.
The Fed is also expected to cut interest rates by the end of this month.
USD/EUR Exchange Rate Steadies as US Markets Await Jobs and Manufacturing Data
US Dollar traders, meanwhile, will be awaiting the printing of the US jobs data for July today.
Any signs of improvement could provide some uplift for the ‘Greenback’.
Today will also see the publication of the US Philadelphia Fed Manufacturing Survey figures for July.
As these are expected to improve, we could see the US Dollar begin to edge higher against the Euro.
Euro US Dollar (EUR/USD) Exchange Rate Rangebound After Eurozone Inflation Holds Steady
The Euro, however, failed to benefit from yesterday’s Eurozone inflation figures for June.
These rose above forecast on a year-on-year from 1.2% to 1.3%, while monthly figures also improved 0.2%.
However as these fell well below the European Central Bank’s (ECB) target of 2%, these have left single currency traders feeling cautious.
Marion Amiot, an Economist at S&P Global Ratings, also added:
‘The global slowdown [could] exacerbate the persistent weak inflationary pressures, which could cause inflation expectations and the ECB’s target to diverge further.’
As fears rise over an ECB interest rate cut in the near-term, this has left the Euro holding steady against the US Dollar today.
EUR/USD Outlook: German PPI Figures in Focus
US Dollar investors will be looking ahead to tomorrow’s flash Michigan Consumer Sentiment Index figures for July.
Euro investors, meanwhile, will be looking ahead to tomorrow’s German PPI figures for June.
As these are expected to decrease, however, we could see the EUR/USD exchange rate begin to fall.