UPDATE: The Euro to US Dollar (EUR/USD) exchange rate was trending within a limited range on Monday morning.
After European data printed positively early on Monday morning, the single currency strengthened versus many of its most traded currency rivals. The gains have been somewhat laboured, however, as traders await Eurozone inflation data.
The US Dollar, meanwhile, advanced versus many of its competitors after oil declined amid tensions in Libya. The US Dollar’s safe-haven status only provides so much insurance, however, with influential data due for publication later on Monday afternoon.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1192.
At the close of last week, the US Dollar to Euro (USD/EUR) exchange rate softened by around -0.13%.
With the Federal Reserve stating that rate revisions would be subject to data and looked at on a meeting-by-meeting basis, North American economic data will be closely scrutinised by rate hawks.
For those invested in the shared currency, data will be more impactful than in previous weeks now that tensions regarding Greece’s future in the Eurozone have finally abated. However, with the European Central Bank (ECB) struggling to source bonds to fund quantitative easing, there is the possibility that data will become second place to bond-purchasing.
US Dollar (USD) Exchange Rate Forecast to Soften
Given that there will be several influential US data publications over the following week, and a vast majority of them are forecast to weaken, there is a high likelihood that the US Dollar will decline over the course of the coming week.
Core Personal Consumption Expenditure is forecast to show growth of 1.2%, down from the previous figure of 1.3%. ISM Manufacturing is predicted to decline from 53.5 to 53.2. In addition, the ISM Non-Manufacturing Composite is expected to cool from 56.7 to 56.5.
As well as the data described above; Personal Income, Personal Spending, Construction Spending, Factory Orders, Changes in Private Payrolls, Two-Month Payroll Net Revision, Average Hourly Earnings, Average Weekly Hours All Employees, Underemployment Rate, Change in Household Employment, ISM Prices Paid, Mortgage Applications, ADP Employment Change, Initial Jobless Claims, Continuing Claims, Labour Force Participation Rate, Trade Balance and Consumer Credit all have the potential to provoke US Dollar volatility.
Euro (EUR) Exchange Rate Forecast to Fluctuate
With little known as to whether European data will have an impact under the weight of inefficiencies from the ECB, the shared currency is likely to fluctuate over the course of the coming week.
Eurozone Consumer prices and the Eurozone Gross Domestic Product data will be significant and hold enough weighting to provoke changes. Additionally; Eurozone Unemployment Rate, Italian Annual GDP, German Retail Sales, Eurozone Retail Sales, German Factory Orders, German Construction PMI, German Retail PMI, Eurozone Retail PMI, Deposit Facility Rate, Marginal Lending Facility and German Industrial Production have the potential to provoke changes for the shared currency.
The ECB rate decision is unlikely to be very significant given that the rate will remain unchanged and the institution has run out of wriggle room with regards to policy changes.
US labour market data will be of significance given that the Fed has stated that rate revisions would be subject to data.
Should the ECB fail to source bonds for quantitative easing, the Euro will tumble as most will feel that the institution cannot provide what they promise.
Any comment or statement from ECB and Fed officials will overshadow data publications with monetary policy dominating trader focus.
At the close of last week, the US Dollar to Euro (USD/EUR) exchange rate was trending in the region of 0.8912.
On Monday morning the US Dollar to Euro (USD/EUR) exchange rate was trading in the region of 0.8943
