EUR/USD Exchange Rate Rangebound, Could an Upbeat Fed Boost the ‘Greenback’?
The Euro to US Dollar (EUR/USD) exchange rate held steady today following the publication of the latest US inflation data for July, which undershot forecasts and fell from June’s 0.9% to 0.3% month-on-month. The pairing is currently trading around $1.17.
The US Dollar (USD) struggled following the publication of the headline inflation gauge for July, which remained at 5.4%, while core inflation eased.
Gwynn Guilford, writing for The Wall Street Journal, explains:
‘Inflation has heated up this year for several reasons. US gross domestic product rose at a rapid 6.5% seasonally adjusted annual rate in the second quarter, powered by consumer spending that climbed at an 11.8% pace as more people received vaccinations, businesses reopened and trillions of dollars in federal aid flowed through the economy.’
Later today will see Raphael Bostic, the 15th President and CEO of the Federal Reserve Bank of Atlanta, deliver a speech.
Could an upbeat statement about America’s economic recovery see the EUR/USD exchange rate head higher.
Euro (EUR) Exchange Rate Rangebound, German Inflation Confirms Consenus
The Euro (EUR) held steady against the ‘Greenback’ today following this morning’s publication of Germany’s harmonised index of consumer prices for July. The figure held steady at 3.1%.
Confidence in the German economy – the largest in the Eurozone –
In absence of any other Eurozone economic data today, EUR investors have largely monitored the bloc’s coronavirus developments.
Ileana Ionescu, an economist at Wise, commented on the growing concerns of a fourth wave of Covid-19 infections in autumn, saying:
‘Concerns over a potential fourth COVID wave in the autumn is hurting economic confidence. COVID numbers in Germany have been steadily climbing higher and are expected to rise even further as people return from holiday. Global supply chain issues and uncertainty over next month’s national elections are adding to the downbeat outlook.’
As a result, EUR investors have remained generally cautious, with fears that rising Covid-19 infections could derail the Eurozone’s economic recovery.
EUR/USD Exchange Rate Forecast: Eurozone Industrial Production Data in Focus
Euro (EUR) investors will be looking ahead to tomorrow’s release of the Eurozone’s industrial production data for June.
Any improvement in the outlook for the Eurozone’s industrial sector would drive-up the EUR/USD exchange rate.
US Dollar (USD) traders will eye tomorrow’s release of the latest initial jobless claims for the week ending on August 6.
If US unemployment levels drop, then we would see the USD/GBP exchange rate head higher as the outlook for the world’s largest economy improves.
