EUR/USD exchange rate rangebound ahead of US data
The euro US dollar (EUR/USD) exchange rate is trading mostly flat this morning following the publication of the Eurozone’s latest GDP data and ahead of several US data releases.
At the time of writing, the EUR/USD exchange rate is trading at around €1.0832, virtually unchanged from this morning’s opening rate.
Euro (EUR) holds steady following GDP
The euro (EUR) is managing to hold steady against the majority of its peers this morning following the publication of the Eurozone’s latest GDP reading.
The preliminary reading for the second quarter of the year came in better-than-expected, printing at 0.3% quarter on quarter, and beat market expectations of a 0.2% prediction.
Pushpin Singh,Senior Economist at the CEBR think tank commented:
‘Flash estimates from Eurostat indicate that the Eurozone economy grey by 0.3% on the quarter in Q2. This rate was above consensus expectations and matched the corresponding growth rate seen in Q1. The stronger-than-expected growth rate suggests the bloc has turned a corner since the start of the year.’
Despite the upbeat data release, the common currency has remained largely subdued following the release, as the data failed to shift current European Central Bank (ECB) interest rate cut expectations.
Further undermining the common currency this morning is a cheery market mood. As markets opt for riskier assets, the safe-haven currency is struggling to catch bids.
US dollar (USD) wavers ahead of domestic data
The US dollar (USD) is trading in a wide range this morning, mostly muted against its peers but faltering against its riskier assets, as USD investors await a duo of impactful data releases this afternoon.
The latest JOLTs Job openings are forecast to decline in June, and are expected to fall from 8.14M to 8.03M, while the latest consumer confidence index is also forecast to decline, expected to fall from 100.4 to 99.7 in July.
Should both sets of data releases deteriorate respectively, this could weigh on USD exchange rates just a day ahead of the Federal Reserve’s upcoming interest rate decision.
Elsewhere, risk-on flows are also hobbling the safe-haven ‘greenback’ this morning as investors opt for riskier assets.
EUR/USD forecast: duo of impactful data to drive movement?
Looking ahead, the primary catalyst of movement for the euro US dollar exchange rate will likely be the publication of the Eurozone’s latest inflation data coupled with the Federal Reserve’s upcoming interest rate decision.
The Eurozone’s preliminary inflation reading for July is forecast to report that both headline and core inflation are moving closer towards the European Central Bank’s (ECB) inflationary target, and could stymie the single currency following the release.
Turning to the US dollar, the Fed’s upcoming interest rate decision could infuse significant volatility into USD exchange rates should investors be met with a dovish consensus surrounding the likelihood of a September rate cut.