UPDATE
US Consumer Confidence bettered expectations in August which caused the US asset to advance versus many of its currency rivals. August’s US Consumer Confidence eclipsed the median market projection of a jump from 90.9 to 93.4, with the actual result reaching 101.5. The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1412 having dived by around -1.4% on Tuesday afternoon.
Earlier…
Euro (EUR) Exchange Rate Softens against the ‘Greenback’ (USD) Despite Positive Data
The Euro to US Dollar (EUR/USD) exchange rate edged lower by around -0.4% on Tuesday morning.
With the equity market in China causing significant turmoil in the currency market, the shared currency rallied versus its peers on Monday thanks to the unwinding of carry trades. Tuesday has seen the Euro soften versus most of its rivals, however, as traders take advantage of the recent surge and buy profits. Even comparatively positive domestic data wasn’t enough to prevent Euro losses.
The finalised figures for German Gross Domestic Product met with median market projections but the German IFO Business Climate gauge came in at 108.3 in August; bettering the market consensus of 107.6. Augusts’ German IFO Current Assessment and IFO Expectations both eclipsed the respective median market expectations. Perhaps these ecostats haven’t been quite as impactful given that the data was compiled ahead of what is now dubbed ‘Black Monday’.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1531.
US Dollar (USD) Exchange Rate Declines against the Single Currency (EUR) on Delayed Fed Rate Hike Bets
With the situation in China causing significant issues in the currency market and contributing to a global economic slowdown, rate hawks have been forced to repress hopes of a September Federal Reserve rate hike liftoff. Many are now expecting delays to continue into 2016. This caused the US asset to soften versus its major peers despite its safe-haven qualities.
US economic data, due for publication during the North-American session, has the potential to provoke changes for the US asset. Augusts’ Consumer Confidence may cause US Dollar volatility, although the prospect of long-term delays to a Fed rate hike will likely overshadow domestic data at this juncture.
The Euro to US Dollar (EUR/USD) exchange rate dropped to a low of 1.1512 during the early stages of Tuesday’s European session.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Fluctuate on Market Volatility
With the situation in China having such a marked impact on the currency market, it is difficult to forecast anything but volatility. The Euro to US Dollar (EUR/USD) exchange rate is likely to fluctuate as a result of said volatility, although changes could potentially be provoked by US data due for publication later on Tuesday.
Wednesday’s US data will also be of significance, but once again has the potential to be overshadowed by market sentiment and trader uncertainties. July’s US Durable Goods Orders, however, would ordinarily cause significant US Dollar movement. European data will be thin on the ground, but European Central Bank (ECB) Board Member Peter Praet’s speech may be impactful.
The Euro to US Dollar (EUR/USD) exchange rate climbed to a high of 1.1585 during Tuesday’s European session.