EUR/USD Exchange Rate Rangebound, French Consumer Confidence Index Provides Eurozone Bright Spot
The Euro US Dollar (EUR/USD) exchange rate held steady today, with the pairing currently trading around $1.108 after October’s French consumer confidence index remained at a 20-month peak of 104, providing a bright spot in the Eurozone’s growth crisis.
Analysts at Reuters commented:
‘The statistics office added that the French households were feeling as confident over their personal financial situations as last month but were more inclined to make big purchases.’
However, the EUR/USD exchange rate held steady as today’s sparse economic data failed to boost market confidence in the single currency.
The UK’s Brexit news remains in focus for Euro traders, with British Prime Minister Boris Johnson losing yesterday’s Fixed Term Parliaments Act (FTPA) vote to trigger a general election on December 12.
If another vote goes forward today, in which Boris Johnson will seek support from the Liberal Democrats and the Scottish National Party, we could see the Euro sink as this would effectively side-line the current UK-EU withdrawal agreement and throw Brexit developments into a state of uncertainty.
USD/EUR Exchange Rate Flat, US Markets Brace for Tomorrow’s Fed Rate Cut
The US Dollar (USD) has remained subdued today ahead of tomorrow’s expected interest rate cut from the US Federal Reserve, which is expected to ease from 2% to 1.75% amid increasing concerns for the US economy.
Deutsche Bank was downbeat in its assessment, saying:
‘[US] [e]conomic policy uncertainty, particularly related to trade policy, is substantially higher (now) than during that earlier episode.’
In US ecostats, ‘Greenback’ traders will be looking ahead to today’s release of the US home sales figures for September. Any signs of improvement could improve market confidence in the US Dollar and potentially boos the USD/EUR exchange rate.
US consumer confidence is also expected to rebound from 1251 to 128.5 in October. As a result, we could see the ‘Greenback’ edge higher against the common currency.
EUR/USD Outlook: Could the ‘Greenback’ Ease on Dovish Federal Reserve Monetary Policy?
Euro traders will be looking ahead to tomorrow’s release of Germany’s flash inflation figure for October, which is expected to ease from 0.9% to 0.8%. If it falls below consensus, however, we could see the single currency fall as the Eurozone’s largest economy continues to show signs of slowing.
Meanwhile, US Dollar investors will be looking ahead to tomorrow’s publication of the preliminary US growth figures for the third-quarter, which is expected to ease from 2% to 1.7% on the year.
The US Federal Reserve’s rate decision will remain in focus. Any signs of dovish monetary policy could considerably weaken the USD/EUR exchange rate.