Euro (EUR) Downtrends after French GDP Disappointment, US Dollar (USD) Softens ahead of Durable Goods Orders
Sentiment has soured towards the Euro (EUR) on Wednesday morning, following an unexpected downwards revision from 1.2% to 1.1% on the third quarter French GDP. After Tuesday’s poor performance the Pound (GBP) has returned to an uptrend ahead of the finalised UK GDP, although pundits are not expecting to see any change. The US Dollar (USD), meanwhile, is bearish in anticipation of this afternoon’s Durable Goods Orders report.
Earlier…
Positive Eurozone data has continued to shore up the Euro (EUR) today as the US Dollar (USD) trends lower in anticipation of a weaker third quarter US GDP.
Euro (EUR) Bullish despite Spanish Election Uncertainty as Consumer Confidence Rises
After the December Eurozone Consumer Confidence result was revised upwards from -5.9 to -5.7 the Euro (EUR) has been on a strong uptrend against both the Pound (GBP) and the US Dollar (USD). Although the inconclusive outcome of Sunday’s Spanish elections initially dented sentiment towards the single currency traders have nevertheless returned to the Euro, dismissing concerns for the time being that a coalition government could force the reversal of at least some austerity measures. The general assessment of the Eurozone remains positive today, as both the latest German Import Price Index and GfK Consumer Confidence Survey bettered estimates.
Euro to US Dollar (EUR/USD) Exchange Rate Trends Higher ahead of US GDP Data Today
With pundits continuing to speculate over the impact and wisdom of the Federal Open Market Committee’s (FOMC) decision to raise interest rates last week the ‘Greenback’ has remained on a generally softer footing. This afternoon’s finalised third quarter US Gross Domestic Product is expected to see a downwards revision from 2.1% to 1.9%, a result which is likely to raise further doubts and see the US Dollar trend lower against rivals.
The outlook for the ‘Greenback’ does not appear especially positive over the rest of the week either, as November Durable Goods Orders are forecast to show a sharp drop on the month to plunge from 2.9% to -0.7%. A weak showing would suggest that output in the world’s largest economy is slowing, certainly implying that the Fed is unlikely to take any particularly hawkish moves in the coming months.
Pound Sterling Currency News: GBP Bearish after UK Borrowing Clocks in Higher than Forecast
Demand for the Pound has declined on Tuesday after the November UK Public Sector Net Borrowing figure proved decidedly disappointing. Putting pressure on Chancellor George Osborne’s fiscal targets, as outlined in the Autumn Statement, government borrowing rose to 13.6 billion Pounds in the last month. This larger-than-expected widening suggests that Osborne will struggle to fulfil his budgetary goals, raising fresh questions as to the viability of his proposed spending plan. Consequently Sterling has slipped across the board, with little chance of a rally as tomorrow’s finalised UK GDP figures are widely expected to show no change.
Current EUR, USD, GBP Exchange Rates
At time of writing, the Euro to US Dollar (EUR/USD) exchange rate was trending higher around 1.0932, while the Euro to Pound Sterling (EUR/GBP) pairing was making gains in the region of 0.7341.
