Several factors saw the Euro strengthen against the US Dollar at the close of last week.
While the Eurozone’s economic outlook was brightened by surprisingly strong growth data for the currency bloc, the US Dollar broadly softened following the publication of concerning industrial/manufacturing figures.
A lack of influential economic data for both the US and the Eurozone limited movement in the EUR/USD pairing during trading on Monday, although the Euro largely retained Friday’s gains. Positive political developments in Italy helped the Euro claw back losses against a bullish Pound.
The disappointing US output reports followed a surprise decline in US retail sales and some less-than-impressive employment data for the world’s largest economy.
Although new Federal Reserve Chairman Janet Yellen has pledged to continue with the central bank’s current plan of tapering stimulus by 10 billion Dollars a month, some investors are concerned that recent developments will mean they have to revise this stance.
According to senior analyst Toshiya Yamauchi; ‘There’s a feeling in the market that the Fed might slow the pace of tapering, or even pause. Dollar weakness is set to continue.’
As US markets were closed on Monday for a national holiday, the ‘Greenback’ was trading in a fairly narrow range against major currency counterparts like the Euro.
Over the next five days considerable EUR/USD movement is likely to occur as investors digest a stream of data releases.
Tomorrow ZEW economic sentiment surveys for the Eurozone and Germany will be published. If the confidence measure for Germany shows the slight dip in sentiment expected the US Dollar could recover losses.
The US NAHB housing market index could also have an impact on the EUR/USD pairing.
As the week progresses, US building permits, housing starts and mortgage application figures will be of interest, as will the publication of minutes from the Federal Open Market Committee’s most recent policy meeting.
By Thursday Eurozone manufacturing/services PMI and US inflation figures will be in the spotlight, and as the week comes to a close US existing home sales data could trigger one last burst of movement.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,US Dollar,1.3696,
Euro,,British Pound,0.8189,
Euro,,Australian Dollar,1.5170,
Euro,,New Zealand Dollar,1.6389,
Euro,,Canadian Dollar,1.5017,
[/table]
