UPDATE
The Euro to US Dollar (EUR/USD) exchange rate declined by around -0.4% in the early stages of Friday’s European session.
With so much uncertainty regarding the extent of the fallout from the revelation that Volkswagen cheated US emissions laws, demand for the common currency dampened considerably. With the currency bloc’s most influential economy so reliant upon its automotive industry, fears that other company’s took a similar approach could undermine sentiment significantly.
After Federal Reserve Chairwoman Janet Yellen stated that it is appropriate to hike the cash rate within 2015, the US Dollar strengthened versus many of its peers. However, China’s Shanghai Composite Index ended the Asian session down which has slowed the Dollar appreciation.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1130.
Yesterday…
EUR/USD Conversion Rate Predicted to Surge despite Mixed German Data
The Euro to US Dollar (EUR/USD) exchange rate dived by around -0.7% on Thursday afternoon.
European economic data produced a mixed-bag of results on Thursday. October’s German Consumer Confidence Survey missed the median market forecast drop from 9.9 to 9.8, with the actual result falling to 9.6. September’s German IFO Business Climate and IFO Expectations both bettered the respective market consensuses. However, German IFO Current Assessment fell below expectations.
‘The dampening of consumer sentiment in August was clearly no flash in the pan. When global economic risks are considered, doubts about future economic prospects are also being generated by various flashpoints and the recent sharp increase in a largely unchecked stream of refugees,’ noted analysts at GfK.
The shared currency avoided a large depreciation on the mixed data results thanks to positive sentiment towards the European Central Bank (ECB). ECB President Marion Draghi said on Wednesday that the central bank was not looking to expand monetary stimulus at this time, and policymakers will want to assess the impact of the current scheme before making more bond purchases.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.1269.
USD/EUR Exchange Rate Forecast to Hold Steady after Shanghai Composite Index saw Thin Trade
Although China’s equity market ended the Asian session 0.86% up, thin trade did little to dent the downtrend following China’s manufacturing output contraction. With Federal Reserve policymakers highlighting external dangers as the principle reason to hold the cash rate lower for longer, the instability in China is weighing on demand for the US asset.
US Durable Goods Orders produced a better-than-expected results, but the report still showed a large contraction which stymied US Dollar gains. August’s Durable Goods Orders was predicted to decline by -2.3%, but the actual result revealed a contraction of -2.0%. Disappointing results from Continuing Claims and Durables ex Transportation also weighed on demand for the ‘Greenback’ (USD).
The Euro to US Dollar (EUR/USD) exchange rate dropped to a low of 1.1163 during Thursday’s European session.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Hold Steady ahead of US Ecostats
In addition to US Durable Goods Orders; Continuing Claims, Durables ex Transportation and Initial Jobless Claims could all impact on the Euro to US Dollar (EUR/USD) exchange rate. The pairing is likely to trend statically ahead of the data releases unless any developments in China provoke changes to market sentiment. Friday is likely to see EUR/USD volatility with several domestic data publications pertaining to both the US and Europe scheduled.
The Euro to US Dollar (EUR/USD) exchange rate climbed to a high of 1.1296 during Thursday’s European session.