The Euro to US Dollar (EUR/USD) exchange rate advanced by around 0.50% on Thursday morning.
The Euro strengthened on Thursday in response to Greece submitting yet another reform proposal on Wednesday. There is a higher likelihood that the proposal will be accepted given that this is one of many revisions.
The US Dollar, however, softened versus many of its major peers after Wednesday’s manufacturing data failed to impress. The US Dollar is unlikely to advance significantly ahead of key labour market data due on Thursday afternoon.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.0826.
Yesterday…
The Euro to US Dollar (EUR/USD) exchange rate was trending within a limited range on Wednesday morning.
After European economic data printed positively, the shared currency edged higher versus many of its most traded currency rivals. The appreciation has been somewhat sluggish, however, with the tension between Greece and creditors stymieing investor confidence.
The US Dollar, meanwhile, is generally trending higher versus most of its major peers in response to Tuesday’s positive consumer confidence print. Traders await US manufacturing data, due for publication later on Wednesday, as a gauge of US Dollar direction.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.0729.
Euro (EUR) Exchange Rate Strengthens on Positive Domestic Data
Although Greece still hasn’t found a proposal of debt repayment that satisfies creditors, the single currency strengthened on Wednesday. This could be as a result of traders feeling that the potential for a Grexit has already been priced-in, and the declination was slightly overdone.
Aiding the uptrend was positive domestic data. The French, German, Italian and Eurozone Manufacturing PMIs all eclipsed median market forecasts. Of the Eurozone Manufacturing PMI Chris Williamson, Chief Economist at Markit, stated; ‘The final PMI reading signalled slightly stronger growth of the manufacturing economy than the preliminary reading, adding further to signs that the Eurozone economy is reviving after last year’s slowdown.’
The Euro to US Dollar (EUR/USD) exchange rate has dropped to a low of 1.0716.
US Dollar (USD) Exchange Rate Holds Gains ahead of Domestic Data
After declining on Tuesday following mixed domestic data results, the US Dollar recovered some of its losses on Wednesday. This is likely to be the result of a belated reaction to very positive consumer confidence data printed on Tuesday. Ongoing geopolitical tension in Europe is also aiding demand for the US Dollar thanks to its safe-haven qualities.
With several influential domestic data publications due later on Wednesday, including the ISM Manufacturing PMI, the US Dollar has the potential to see heightened volatility.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Fluctuate
As mentioned above, several significant US data publications ought to cause ‘Greenback’ (USD) volatility, which means the Euro to US Dollar (EUR/USD) exchange rate is likely to fluctuate. With the situation in Greece far from resolution, however, the potential for the single currency to resume declination is high.
A lack of European data on Thursday ought to see geopolitics as the driving force behind Euro movement.
The Euro to US Dollar (EUR/USD) exchange rate advanced to a high of 1.0792 today.
