The Euro to US Dollar (EUR/USD) exchange rate softened by around -0.66% on Tuesday morning.
Although German economic data produced positive results on Tuesday, the single currency softened versus the majority of its most traded currency competitors. This can be attributed to fears that Greece will turn to Russia for help after their latest reform proposal was rejected by creditors.
The US Dollar, meanwhile, continues to trend higher versus the majority of its most traded currency rivals on Tuesday. This is as a result of positive results from Monday’s data seeing heightened demand for the US Dollar.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.0749.
Yesterday…
The Euro to US Dollar (EUR/USD) exchange rate softened by around -0.72% on Monday afternoon.
After Eurozone economic confidence bettered estimates, the shared currency trimmed losses racked up by ongoing uncertainty regarding Greece’s program of reform. Inflation data, due later on Monday, may see the single currency advance if the results meet with or exceed expectations.
The US Dollar, meanwhile, gained versus nearly all of its most traded currency competitors after Federal Reserve Chair Janet Yellen stated that a rate hike is not far away. With several influential data publications due later on Monday, there is a high likelihood of US Dollar volatility.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.0818.
Euro (EUR) Exchange Rate Fluctuates ahead of German Inflation
With the ongoing issues between Greece and its creditors continuing to weigh on investor confidence, the single currency has seen significant losses. ‘Uncertainty over the future of Greece is having a detrimental impact on confidence,’ said Christiane von Berg, an economist at Bayerische Landesbank. ‘Not much has changed from February’s agreement. Athens and Brussels were confrontational and have yet to meet somewhere in between.’
However, an improvement to Eurozone economic confidence saw the Euro recover slightly versus many of its major peers. ‘The improvement in Euro area sentiment was fuelled by brightening confidence among consumers, but confidence also improved among managers in retail trade, services, construction and, particularly, industry,’ the survey said.
The Euro to US Dollar (EUR/USD) exchange rate has dropped to a low today of 1.0817.
US Dollar (USD) Exchange Rate Holds Gains ahead of Domestic Data
After Fed Chair Janet Yellen made hawkish remarks with regards to a benchmark interest rate increase, the ‘Greenback’ (USD) held gains versus the majority of its most traded currency counterparts.
‘If conditions do evolve in the manner that most of my [Fed] colleagues and I anticipate, I would expect the level of the federal funds rate to be normalized only gradually, reflecting the gradual diminution of headwinds from the financial crisis and the balance of risks I have enumerated of moving either too slowly or too quickly,’ she said.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Fluctuate
Given that there are several influential data publications due for Europe and the US, the Euro to US Dollar (EUR/USD) exchange rate is likely to fluctuate over the course of the European session. Of particular significance will be German inflation data and US inflation data.
Tuesday is likely to see significant EUR/USD volatility with US Consumer Confidence and Eurozone inflation data due for publication.
The Euro to US Dollar (EUR/USD) exchange rate has reached a high of 1.0885 today.
