The Euro to US Dollar (EUR/USD) exchange rate ticked higher by around 0.29% on Wednesday morning.
After the Eurogorup accepted Greece’s debt repayment programme and granted a four-month extension, the shared currency strengthened versus many of its major peers. However, the gains have been somewhat laboured thanks to ongoing concern that the German government won’t accept the proposal.
The US Dollar, meanwhile, softened versus the majority of its most traded currency rivals on Wednesday. This is the result of a relatively dovish speech from Federal Reserve Chair Janet Yellen, who disappointed hawks by continuing to use rhetoric like ‘patience’.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1378.
Yesterday…
The Euro to US Dollar (EUR/USD) exchange rate was trending within a limited range on Tuesday afternoon.
Despite mixed US data erring towards the positive, the Dollar advance has been somewhat laboured as traders await a speech by Federal Reserve Chair Janet Yellen. With opinions divided as to whether she will be hawkish or dovish, the US Dollar is holding relatively steady versus most of its major peers.
The Euro, meanwhile, gained versus many of its most traded currency rivals after the Eurogroup accepted Greece’s proposal for debt repayment. The gains have been small, however, as the programme has not yet been accepted by the German government.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1314.
Euro (EUR) Exchange Rate Crawls Higher as Eurogroup Accepts Greek Debt Repayment Programme
The European Commission described Greece’s hastily put-together programme for debt repayment as ‘a valid starting point’. This eased tensions regarding a Grexit, with only the obstacle of the German government left to hurdle. Domestically, however, the new Greek government may struggle to regain the trust of those voters who were expecting reformation from the anti-austerity party.
‘We call on the Greek authorities to further develop and broaden the list of reform measures, based on the current arrangement, in close co-ordination with the institutions,’ the Eurogroup said in a statement.
Not everyone agrees with the proposals, however. International Monetary Fund head Christine Lagarde said; ‘In some areas like combating tax evasion and corruption I am encouraged by what appears to be a stronger resolve on the part of the new authorities in Athens. In quite a few areas, however, including perhaps the most important ones, the letter is not conveying clear assurances that the government intends to undertake the reforms envisaged.’
The Euro to US Dollar (EUR/USD) exchange rate dropped to a low today of 1.1287.
US Dollar (USD) Exchange Rate Fluctuates ahead of Fed Chair Speech
Mixed results from US data had minimal impact on the US Dollar whilst traders await a speech from Fed Chair Janet Yellen. The Services and Composite PMIs improved upon previous figures, but Consumer Confidence dropped beyond the median market forecast.
Commenting on the flash PMI data, Markit’s chief economist Chris Williamson said: ‘Stronger growth of service sector activity in February puts a June Fed rate rise firmly back on the table. While parts of the East coast have struggled in the face of adverse weather, other regions basked in unusually warm temperatures, boosting business above seasonal norms. Activity levels surged higher and inflows of new business boomed as a result.’
Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Fluctuate
With opinions varied as to the acceptability of the Greek debt repayment programme, and with opinions divided regarding Fed policy outlook, the Euro to US Dollar (EUR/USD) exchange rate is likely to fluctuate for the remainder of Tuesday’s trade.
The Euro to US Dollar (EUR/USD) exchange rate reached a high today of 1.1351.
