EUR/USD exchange rate flat despite upbeat German data
The euro US dollar (EUR/USD) exchange rate is trapped in a narrow range this morning despite the publication of some better-than-expected domestic data from Germany.
At the time of writing, the EUR/USD exchange rate is trading at around €1.1085, virtually unchanged from this morning’s opening rate.
Euro (EUR) buoyed by German data
The euro (EUR) is managing to drift higher against the majority of its peers this morning, supported by the publication of Germany’s latest industrial production data.
Augusts’ index printed well above market expectations this morning, rising from a previous reading of -2.9% up to a positive 2.9% reading, well ahead of a more modest 0.8 expectation.
This bolstered EUR sentiment in the wake of the release, as the index printed firmly above forecasts.
Destatis commented:
‘Currently, production in the automotive industry fluctuates considerably from month to month and this has an impact on the monthly development of production in industry as a whole.’
However, despite this forecast beating print, the euro has failed to rise further in the aftermath of the release.
US dollar (USD) quiet amid data-light trading session
The US dollar (USD) is finding it difficult to attract investor attention this morning as a dearth of significant US data releases has left the ‘greenback’ largely directionless.
Nonetheless, USD exchange rates are receiving some modest backing from today’s risk-averse market sentiment.
Given its status as a safe-haven currency, the USD is benefiting from today’s anxious trading environment amid a lack of further drivers.
EUR/USD forecast: central bank speeches in focus
Looking ahead, the primary catalyst of movement for the euro US dollar exchange rate looking ahead to tomorrow will likely be several upcoming speeches from both the Federal Reserve and the European Central Bank (ECB) amid a lack of any further economic data.
Looking at the US dollar, any dovish commentary from Fed officials could see 50 basis-point interest rate cut bets reappear and in turn dampen USD sentiment.
However, should the upcoming speeches continue to deter away from another whopping 50 bps cut, the ‘greenback’ could firm against its peers as a result.
Similarly, EUR exchange rates could also experience volatility following ECB commentary amid shifting ECB interest rate cut bets.
Should the European central bank provide any dovish commentary, the single currency will likely dip on the back of increased interest rate cut bets.
However, should ECB members also push back on upcoming rate cuts, the common currency could close the week on the front foot.