The Euro to US Dollar (EUR/USD) exchange rate softened by around -0.25% on Wednesday morning.
After European data produced mixed results, the single currency softened versus many of its major peers. Now that the dust has settled from the massive injection of liquidity and the recent Grexit anxieties, the common currency is finally reacting to domestic data.
The US Dollar, meanwhile, is generally edging higher versus most of its major rivals as traders expect some action from the Federal Open Market Committee meeting later on Wednesday evening. Although it is doubtful that they will raise rates this time around, many experts anticipate a change in language that will indicate a rise in the near-future.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1338.
Yesterday…
The Euro to US Dollar (EUR/USD) exchange rate advanced by around 0.38% on Tuesday.
After Grexit fears mounted following left-wing Syriza gaining office in Greece, the Euro softened versus all of its major peers. However, that declination was seen as unjustified with the Syriza government less likely to enforce an anti-Eurozone campaign as part of a coalition.
The US Dollar, meanwhile, is generally trending lower versus most of major rivals as traders await significant domestic data.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1292.
Euro (EUR) Exchange Rate Rebounds as Grexit Fears Ease
As previously mentioned, the Euro recovered some of its losses on Tuesday after trader anxieties regarding a Grexit eased. Although both parties in the coalition are anti-austerity, they pose less of a threat in terms of being able to agree on such a momentous change. Yanis Varoufakis, an economist and Syriza lawmaker, said; ‘We want to sit down with our colleagues in Europe and find a mutually beneficial agreement.’
However, if Greece was hoping to get its debt wiped, the nation will find it very difficult as Jacob Funk Kirkegaard, a senior fellow at the Peterson Institute for International Economics in Washington, stated; ‘It’s true that the Greek electorate has spoken yesterday,’ Still, ‘Greece owes its debt to other taxpayers in the Euro area and guess what, they have a vote too,’ he added.
The Euro to US Dollar (EUR/USD) exchange rate has fallen to a low today of 1.1221.
US Dollar (USD) Exchange Rate Ticks Lower ahead of Influential Data
As traders await significant data pertaining to North America, the US Dollar is generally trending lower versus many of its major peers. Durable Goods Orders is forecast to appreciate from -0.9% to 0.3%. In addition, Consumer Confidence is forecast to rise from 92.6 to 95.
Wednesday’s Federal Open Market Committee (FOMC) meeting will be of significance and is likely to provoke volatility for the US Dollar. Hawks will be hoping that the recent measures taken by the European Central Bank will lead to a Federal Reserve rate hike.
‘We’ve been expecting Dollar strength, and it’s coming quicker than we thought,’ stated a New York bases strategist. Fed officials ‘may feel they actually have to advance the first tightening rather than put it off.’
Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Soften
The US data is of high enough significance that it’s likely to cause US Dollar volatility. Should the data meet with, or exceed, expectations the Euro to US Dollar (EUR/USD) exchange rate is likely to soften.
The Euro to US Dollar (EUR/USD) exchange rate reached a high today of 1.1345.