UPDATE
On Thursday morning the Euro to US Dollar (EUR/USD) exchange rate edged higher by around 0.1%.
After the Federal Reserve minutes from the most recent policy meeting proved comparatively hawkish, with most policymakers expecting to raise the cash rate in December, the US Dollar rallied versus its peers. However, the US Dollar cooled during Thursday’s European session after the surge opened up some attractive selling opportunities.
The Euro, meanwhile, edged higher versus many of its rivals thanks to Dollar weakness.
The Euro to US Dollar (GBP/USD) exchange rate is currently trending in the region of 1.0683.
Yesterday…
EUR/USD Conversion Rate Edged Higher after Yearly Eurozone Construction Output Growth Accelerated
The Euro to US Dollar (EUR/USD) exchange rate strengthened by around 0.3% on Wednesday morning.
In response to a static US Dollar as traders await minutes from the most recent Federal Open Market Committee (FOMC) meeting, the shared currency edged higher versus its most traded currency peers. Euro gains have been somewhat sluggish, however, given that the potential for widening policy divergence between the European Central Bank (ECB) and the Federal Reserve in December continues to hinder investor confidence.
Today’s Eurozone Construction Output data produced mixed results. On the month, construction output contracted by -0.4% in September. However, on an annual basis Euro-area construction output accelerated by 1.8% in September. ‘The data show that the Eurozone’s construction sector is struggling despite a revival in conditions in the rest of the economy. The Eurozone economy expanded 0.3 per cent in the three months to September and has grown at a moderate pace this year after narrowly avoiding a third recession since the financial crisis in 2014,’ stated Chris Papadopoullos writing for City A.M.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.0674.
USD/EUR Exchange Rate Predicted to Hold Losses ahead of US Housing Data
With the looming FOMC minutes weighing on demand for the ‘Greenback’ (USD), the North American asset edged lower versus its major peers this morning. The USD/EUR exchange rate dropped from a 7-month high. ‘It’s a position adjustment ahead of key events this week, including the Fed minutes,’ said Valentin Marinov, the head researcher at Credit Agricole SA’s corporate and investment bank unit in London. ‘A lot of positives have already been in the price.’ Marinov added ‘The October minutes could be perceived as dovish if they highlight policymakers’ concerns about the renewed appreciation of the Dollar and the tightening in US financial conditions evident in the rates markets.’
There is, however, the potential for US Dollar volatility ahead of the meeting minutes with several domestic data publications due. MBA Mortgage Applications, Housing Starts and Building Permits all have the potential to provoke USD changes.
The Euro to US Dollar exchange rate dropped to a low of 1.0629 during Wednesday’s European session.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast: FOMC Minutes to Dictate Positioning
Given that traders are looking for any clues to gauge the timing of a Federal Reserve overnight cash rate increase, the first in over a decade, the FOMC meeting minutes have the potential to be hugely influential over the EUR/USD conversion rate.
Thursday could also see heightened EUR/USD volatility with the ECB due to publish meeting minutes and with US labour market data due for publication.
The Euro to US Dollar (EUR/USD) exchange rate climbed to a high of 1.0693 during Wednesday’s European session.
