The Euro to Canadian Dollar (EUR/CAD), Euro to Turkish Lira (EUR/TRY) and Euro to Indian Rupee (EUR/INR) exchange rates all gained ground on Wednesday while the Euro to Japanese Yen (EUR/JPY) and Euro to Russian Ruble (EUR/RUB) exchange rates fell.
Speculation surrounding the ongoing Greek negotiations suggests that the country may ask for an extension in its current loan deal in order to buy time before a long-term agreement is reached.
Industry expert Mike van Dulken commented: ‘The positive open comes as talks between Greece and the Eurogroup continue this week with PM Tsipras indicating yesterday that, while he remains absolutely committed to forging an agreement with the creditors, the two parties remain far from striking a deal.’
Later… As the session continued Greece did indeed formally ask for an extension in its current debt repayment programme; however, Germany stated that it would be against the approval of such a request.
Earlier… The Euro to Canadian Dollar (EUR/CAD), Euro to Turkish Lira (EUR/TRY) and Euro to Russian Ruble (EUR/RUB) exchange rates all fell on Tuesday as Greek talks faltered, while the Euro to Japanese Yen (EUR/JPY) and Euro to Indian Rupee (EUR/INR) exchange rates gained.
As ongoing Greek negotiations continue, many economists are suggesting Greece exiting the Eurozone could be a very real threat. Greece is refusing to succumb to pressures from other Eurogroup heads.
German finance minister Wolfgang Schauble has stated that the ball is in Greece’s court, stating: ‘We are not much further than we were. And as we know the situation in Greece is not getting any better.’
Earlier… The Euro to Canadian Dollar (EUR/CAD), Euro to Indian Rupee (EUR/INR), Euro to Japanese Yen (EUR/JPY) and Euro to Turkish Lira (EUR/TRY) exchange rates gained in Monday’s European session while the Euro to Russian Ruble (EUR/RUB) exchange rate softened. As Eurogroup heads attempt to negotiate a deal with regards to Greece’s debt repayments, finance minister Yanis Varoufakis has been reported to say that he will continue talks throughout the night if necessary.
Oil Prices Fall after Japanese GDP Figures – Canadian Dollar Declines
The Euro to Canadian Dollar (EUR/CAD) exchange rate enjoyed an upswing during Monday’s trading when the price of oil fell, despite signs of firming earlier in the session. Japan’s growth was weaker than expected in the fourth quarter of 2014 and sparked speculation that oil demand would decline. The annualised Japanese Gross Domestic Product (GDP) ecostat was expected to reach 3.7% in Q4, but printed at only 2.2%.
Bank of America Merril Lynch commented on the oil drop, saying: ‘We continue to believe that neither supply nor demand will respond materially near-term. On our estimates, global supply is running 1.4 million barrels per day above global demand in 1H15 up from 0.9 in 4Q14.’ ‘Thus inventory dynamics could continue to deteriorate in coming weeks, leading to downside pressure on near-dated contracts. We reiterate our view that Brent will trade below $40 per barrel over the next two months.’
The price of oil has tumbled by around 60% in recent months and the Canadian Dollar commodity currency has been subject to losses against other major currencies, including the Euro (CAD/EUR).
Turkish Unemployment Rises – TRY/EUR Softens
Meanwhile, the Turkish Lira to Euro (TRY/EUR) exchange rate was offered little support when the Turkish Unemployment Rate rose to its highest level in the last four years, coming in at 10.7% from 10.4%. Economists had forecast a smaller rise in November to 10.6%. The ecostat revealed the fourth consecutive month of double- digit joblessness after Turkey’s economic growth progressed at a slower pace than forecast in the first three quarters of 2014.
Rupee (INR) Softer after India’s Wholesale Price Index Contracts – Deflation Fears Set In
The Indian Rupee also took a tumble against the Euro (INR/EUR) when India’s Wholesale Price Index fell into the negatives in January at -0.39% after December’s +0.11%. Economists had expected prices to increase by 0.77% in the first month of 2015 and now fear the prospect of deflation in the sector.
Forex expert Mythili Bhusnurmath commented: ‘Deflation in the world is affecting us as well. Manufacturers are losing their pricing power. We already have corroboratory evidence of surplus capacity. Lower pricing power for corporate implies that there will be less incentive to manufacture goods.’ ‘If we look at the inflation numbers in the past few months, they have been on the decline. The inflation data reaffirms the belief that it is time to focus on growth.’
The Russian Ruble to Euro (RUB/EUR) exchange rate advanced ahead of Russian Industrial Production stats due out later in the day. The December year-on-year index resided at 3.9% and economists have forecast the ecostat fell to 0.8%. The Ruble has fallen in recent weeks as conflict between Russia and Ukraine escalated. A ceasefire was expected to have taken place at midnight—however; there are reports of the conflict continuing.
One Ukrainian soldier commented: ‘There’s no ceasefire here.’ Another commented on the continued shelling, saying: ‘It’s a present from Putin.’
Euro Exchange Rate Forecast: EUR/CAD, EUR/TRY, EUR/INR, EUR/JPY, EUR/RUB
The Eurozone’s trade balance took a surprising upswing on Monday, residing at 23.3B in December after November’s 21.6B—despite economists forecasting a fall to 19.0B. Exports surged by 8.0% year-on-year and imports only crept 1.0% higher. However, as negotiations between Greece and its creditors continue, the Euro exchange rate could be extremely volatile.
Finance ministers are expecting some progress to be made on Monday but doubt surrounding the situation is continuing to circulate. ZEW’s German and Eurozone Economic Sentiment Survey are due for publication on Tuesday and could cause major Euro exchange rate movement.
The Euro to Turkish Lira (EUR/TRY) exchange rate resides at 2.8016. The Euro to Japanese Yen (EUR/JPY) exchange rate is trading at 135.4319. The Euro to Indian Rupee (EUR/INR) exchange rate is reaching 71.0314. The Euro to Russian Ruble (EUR/RUB) exchange rate is trading at 71.1560. The Euro to Canadian Dollar (EUR/CAD) exchange rate is trending in the region of 1.4206.