- EUR USD drops to low of 1.1512 – Traders await Thursday’s ECB meeting.
- US housing numbers rebound – Figures massively surpass expectations.
- Eurozone construction stats slide – Euro sees small losses.
- US Crude Oil Stocks Drop – Inventory reveals a 4.727 million barrel decrease.
The Euro to US Dollar exchange rate has steadily dropped today as US housing figures rebounded far more significantly than anticipated.
Housing starts increased a whopping 8.3%, reaching a seasonally adjusted annual rate of some 1.22 million units – the highest it’s been since February.
Housing sales for May were revised to 1.12 million units, up from a previous estimate of 1.09 million units.
US Building permits for June also increased by 7.4%, easily overtaking the expected figure of 2.8% and the previous month’s decline of -4.9%.
This run of positive data was enough to ward off lingering distaste for the ‘Greenback’ from yesterday’s drama surrounding the Republican health care bill.
EUR Fluctuates as Eurozone Construction Output Slips
Whilst the data calendar for the Euro has been somewhat sparse today and market attentions remain fixed on tomorrow’s ECB meeting, there was news that the annual rate of construction output in the Eurozone had slowed in May.
Eurozone construction eased from 3.3% to 2.6% on the year, continuing a trend of deceleration that has persisted since February.
Whilst this did contribute to the Euro struggling against the ‘Greenback’ today, overall the Euro still remains close to multi-year highs against the US Dollar.
Oil Prices Rise as US Crude Oil Stocks Drop
It was announced today that US crude oil stocks dropped 4.727 million barrels in the week ending 14th July following the previous drop of 7.564 million barrels. This beat expectations of a 3.214 million barrel drop.
The US Dollar was slightly supported by the result, with Brent crude oil already registering gains.
EUR USD Forecast: Thursday’s ECB Meeting to Drive Euro/US Dollar Movement
Whilst the outlook for this pairing remains somewhat positive, the significance of tomorrow’s ECB meeting cannot be overstated. Thursday brings with it the potential for the EUR USD exchange rate to slide in either direction, however, it should be noted that economists do not expect the ECB to make any policy adjustments at this juncture – especially with inflation being nowhere near target levels.
Instead, it is the possibility that the ECB will provide some insight into future plans (especially surrounding the tapering of its bond-buying program) that will drive or kill demand for the single currency.
Should the central bank continue to be dovish, however, then the Euro will likely plummet in the short-term.
On a slightly smaller note for the US, July’s initial jobless claims data will be released, as well as leading indicator figures for June. Currently jobless claims are forecast to drop, something that, should it materialise, will likely work to bolster the ‘Greenback’ to a small degree.
Current Interbank EUR USD Exchange Rates
At the time of writing, the Euro to US Dollar (EUR USD) exchange rate was trading at 1.1528 and the US Dollar to Euro (USD EUR) exchange rate was trading at 0.8672.
