EUR/USD Exchange Rate Rises on Rising German Exports in April
The Euro to US Dollar exchange rate rose today following the release of the latest German export data, which continued its recovery in April despite continued lockdown restrictions. The pairing is currently fluctuating around $1.21.
The Euro (EUR) benefited from the latest German exports figure for April which rose by 0.3%, falling short of forecasts of a 0.5% increase.
Analysts at Reuters commented on the data:
‘German exports rose in April, prompted by increasing trade with the United States, suggesting a continued recovery in Europe’s biggest economy.
‘Seasonally adjusted exports increased by 0.3% on the month after an upwardly revised rise of 1.3% in March, the Federal Statistics Office said on Wednesday.’
Alexander Krueger, an analyst at Bankhaus Lampe, was also optimistic about the outlook for the Eurozone’s largest economy, saying:
‘After eleven increases in a row, the export sector can take it easy. Especially since its outlook remains positive.’
In the absence of any other notable Eurozone economic data today, the EUR/USD exchange rate has performed strongly on an improving outlook for the bloc’s economic recovery this year.
US Dollar (USD) Exchange Rate Dips as Chinese Economy Continues to Recover
The US Dollar (USD) suffered from improving risk-sentiment today as the Chinese economy continues to post strong economic data, buoying confidence in riskier assets as the world’s second largest economy recovers from the Covid-19 pandemic.
Analysts at Goldman Sachs have also upgraded their expectations for US inflation, which they now expect to drop by year-end.
Goldman Sachs said in its statement:
‘Our economists recently raised their near-term inflation forecasts while maintaining their expectation that inflation will begin to abate later in the year.
‘In April, both core PCE (+3.1% y/y) and core CPI (+3.0% y/y) exceeded expectations and notched highs not seen in more than two decades. Our economists that core PCE will register 2.5% at the end of 2021 and decline to 2.1% during 2022.’
In the absence of any notable US economic data today, however, US Dollar investors are looking ahead to tomorrow’s publication of US inflation data.
Euro US Dollar Exchange Rate Forecast: US Inflation Data in Focus
US Dollar (USD) traders will closely monitor tomorrow’s release of the latest US consumer price index for May.
Any signs of rising inflation would be see the ‘Greenback’ fluctuate, as this could prompt action from the Federal Reserve.
If the US economy looks like its recovery is slowing down, however, then we could see the US Dollar fall.
Tomorrow will see the European Central Bank (ECB) announce its latest interest rate decision. The figure is however expected to remain at 0%.
If the ECB is notably bullish and upbeat about the outlook for the Eurozone economy in its monetary policy statement, then the EUR/USD exchange rate would head higher.