UPDATE
The Euro to US Dollar (EUR/USD) exchange rate declined by around -0.2% on Friday morning.
In response to less-than-ideal growth data out of France and Germany, the single currency edged lower versus its major peers. French Gross Domestic Product stagnated in the second quarter whilst German growth failed to meet with expectations. The single currency avoided a large depreciation, however, on news that Greek MPs have accepted the terms of the nation’s third bailout deal.
Having produced mixed data results on Thursday, the US Dollar is holding relatively steady on Friday morning. The US asset is unlikely to see any significant volatility ahead of Industrial Production, Manufacturing Production and the University of Michigan Confidence report due for publication later on Friday afternoon.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1133.
Yesterday…
Euro (EUR) Exchange Rate Forecast to Soften against the ‘Greenback’ (USD) on Unjustified Gains
The Euro to US Dollar (EUR/USD) exchange rate declined by around -0.3% on Thursday morning.
On Wednesday the single currency surged against many of its currency rivals in response to news that Greek officials had agreed terms of the third bailout package with Eurozone officials and creditors. However, once details of the deal emerged, the common currency lost ground amid fears that the current deal is only delaying an inevitable return to Greek financial crisis.
Greece’s former finance minister Yanis Varoufakis has been particularly vocal in showing distain for the deal, warning that it is doomed to fail. With what is considered a thinly veiled insult to his former ally, Greek Prime Minister Alexis Tsipras, Varoufakis stated; ‘Ask anyone who knows anything about Greece’s finances and they will tell you this deal is not going to work. The Greek finance minister… says more or less the same thing.’
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1117.
US Dollar (USD) Exchange Rate Forecast to Hold Gains against the Common Currency (EUR) ahead of US Advance Retail Sales
In response to the People’s Bank of China’s (PBoC) decision to intervene in the currency market in order to significantly devalue the Yuan, the US Dollar dived versus its peers. This was due to fears that the global economic outlook would weaken as a result of issues in China and see the Federal Open Market Committee (FOMC) delay a benchmark rate hike until well into 2016.
On Thursday the US asset recovered some of its losses as Yuan panic selling eased and the Chinese asset stabilised. Advance Retail Sales, due for publication later on Thursday, will have a significant impact on US Dollar volatility.
The Euro to US Dollar (EUR/USD) exchange rate has fallen to a low of 1.1104 today.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Fluctuate on US Data
Given that US data on Thursday contains labour market reports and that the FOMC stated labour market improvement was a prerequisite for rate hikes, the Euro to US Dollar (EUR/USD) exchange rate is likely to fluctuate over the course of Thursday’s European session.
Friday will be of significance to the EUR/USD pairing with German second-quarter Gross Domestic Product due for publication. Eurozone inflation data is also likely to provoke EUR/USD volatility. In terms of US data, the University of Michigan Confidence report will be particularly significant. However, it is fair to say that geopolitical developments in Greece and China could overshadow any domestic data result.
The Euro to US Dollar (EUR/USD) exchange rate climbed to a high of 1.1189 today.