The Euro to US Dollar (EUR/USD) exchange rate softened by around -0.23% on Tuesday morning.
With mounting speculation that the frayed relationship between Greece and Eurogroup officials will lead to a Greek exit from the Eurozone, whether voluntarily or forced, the single currency softened versus many of its major peers. Reasonably positive results from German data weren’t enough to boost investor confidence.
The US Dollar, meanwhile, continues to strengthen as a result of demand for safe-haven assets. Although the Monthly Budget Statement declined beyond expectations, the US Dollar is still holding a position of strength versus the vast majority of its most traded currency competitors.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.0548.
Yesterday…
The Euro to US Dollar (EUR/USD) exchange rate softened by around -0.16% on Monday afternoon.
With the relationship between Greece and the Eurogroup skating on increasingly thin ice, the shared currency softened during Monday’s European session. Mounting fears that the new Greek government will not be able to juggle pleasing both its creditors and the people of Greece in conjunction with the increasing likelihood of a forced Greek exit from the Eurozone are making traders reluctant to invest in the common currency.
The US Dollar, meanwhile, edged higher versus many of its major peers in response to dampened trader risk appetite. The ongoing geopolitical tensions, coupled with weak data out of China, have seen heightened demand for safe-haven assets.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.0580.
Euro (EUR) Exchange Rate Softens on Greek Struggle
With increasing fears that the new Greek government has alienated itself from Eurozone officials, with solutions to their massive debt crisis becoming thin on the ground as a result, traders are showing increasing reluctance to buy into the single currency. A complete absence of domestic data has only exaggerated the decline.
If Athens had managed to secure the relief needed to pay off the extensive International Monetary Fund (IMF) loan early, and redeem bonds held by the European Central Bank (ECB), they could have saved a significant amount of money. Now that the relationship between Prime Minister Alexis Tsipras’ leftist-led government and Eurozone officials has frayed, however, the likelihood of securing the requisite funds in time is depleting with every failed attempt at presenting amicable reforms.
‘This step would save Greece’s budget billions of Euros, while reforming the Troika arrangement, eliminating the IMF’s and the ECB’s financial exposure to Greece,’ said Jacob Funk Kirkegaard, senior fellow at the Peterson Institute for International Economics.
The Euro to US Dollar (EUR/USD) exchange rate dropped to a low today of 1.0519.
US Dollar (USD) Exchange Rate Edges Higher on Market Sentiment
The US Dollar edged higher versus many of its most traded currency competitors during Monday’s European session. This is due to heightened demand for safe-haven assets amid difficulties between Greece and Eurozone officials. Aiding the dampened trader risk-appetite was particularly weak trade data out of China, which saw both imports and exports decline beyond expectations.
The ‘Greenback’ advance has been somewhat slowed, however, as traders await March’s Monthly Budget Statement, which is forecast to decline from -$36.9 billion to -$43.4 billion.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Hold Gains
Although US data due for publication later on Monday is forecast to decline; the situation in Greece ought to overshadow domestic data publications. Therefore, the Euro to US Dollar (EUR/USD) exchange rate is likely to hold gains for the remainder of Monday’s trade.
Tuesday should see heightened EUR/USD volatility with several data releases pertaining to both Europe and the US due for publication. US Advance Retail Sales will be an important report for those invested in the US Dollar.
The Euro to US Dollar (EUR/USD) exchange rate reached a high of 1.0620 today.
