UPDATE:
The Pound Sterling to US Dollar (GBP/USD) exchange rate advanced on Thursday afternoon after US jobs data failed to impress. Even the seemingly impressive headline figure for unemployment, which saw a drop from 5.5% to 5.3% was the result of a lower-than-anticipated participation rate.
The Euro to US Dollar (EUR/USD) exchange rate advanced by around 0.37% on Thursday morning.
Despite the fact that the Greek situation worsened after optimism of a last-minute deal was dashed by Eurozone officials, the shared currency strengthened versus its peers on Thursday morning. This is likely to be the result of the European Central Bank (ECB) deciding not to cut off aid to Greek banks at this juncture.
The US Dollar, meanwhile, is generally holding steady versus its competitors after having strengthened in response to better-than-expected manufacturing output. As traders await economically significant labour market data, the US asset is unlikely to see volatility.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1076.
Euro (EUR) Exchange Rate Forecast to Strengthen against the ‘Greenback’ (USD) Despite Greek Woes
After the European Central Bank stated that the limited bailout fund aiding Greek banks to avoid complete insolvency would continue, the shared currency advanced versus its peers. However, the ECB are in a slight dilemma because Emergency Liquidity Assistance (ELA) can only be provided to banks that are solvent in accordance with their own rules.
‘It is very difficult to see how one could conclude that banks that are basically closed because they have no access to cash, operating under a government that has just defaulted to the IMF, could possibly be solvent,’ said Gary Jenkins, chief credit strategist at London-based LNG Capital, in a note.
The Euro to US Dollar (EUR/USD) exchange rate dropped to a low of 1.1034 today.
US Dollar (USD) Exchange Rate Forecast to Hold Losses against the Common Currency ahead of Key US Data
As traders prepare for results from highly significant US labour market data, the ‘Buck’ (USD) is generally holding steady versus most of its major peers. A slight appreciation can be linked to demand for safe-haven assets as the situation in Greece continues to spook investors.
After a recent spate of positive ecostats, which saw manufacturing and consumer confidence advance beyond expectations, many analysts are predicting a better-than-forecast non-farm payrolls print. Should the data provide positive results it will put a great deal of pressure on Federal Open Market Committee (FOMC) members to consider a rate hike in September.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Hold Gains ahead of North American Change in Non-Farm Payrolls and Unemployment Rate
Given the significance of the US data and the likely volatility that will result from the publication, the Euro to US Dollar (EUR/USD) exchange rate is likely to hold gains ahead of the release. With that being said, however, there is the potential for a Euro crash if any more bad news comes from the Hellenic nation or its creditors.
The Euro to US Dollar (EUR/USD) exchange rate climbed to a high of 1.1087 today.
