The Euro to US Dollar exchange rate has continued to fall by -0.4% on the afternoon of 27th March, due to persistent low confidence in the Eurozone.
Offering additional information on the Eurozone’s disappointing sentiment scores, Reinhard Cluse of UBS has stated;
‘Firms seem most concerned about uncertainty related to the future of the EU, the policies of the US administration and Brexit.
Concern over the political situation in Spain and Germany has risen. But surprisingly, the political climate in Italy seems to be only of moderate concern’.
(First published 27th March, 2018)
Sliding Confidence in the Eurozone Triggers EUR/USD Exchange Rate Slide
The Euro to US Dollar (EUR/USD) exchange rate has fallen by -0.4% today, following the news that confidence in the Eurozone economy has tumbled in March.
Levels of business confidence and economic sentiment have fallen, along with sentiment about industrial activity in the single currency bloc.
This all-around slowdown has seen most data index readings fall by more than forecast, which has cemented today’s Euro exchange rate losses.
US Dollar to Euro (USD/EUR) Exchange Rate Rises 0.5% on Hopes of Averted ‘Trade War’
The US Dollar has risen by 0.5% against the Euro today, following reports that there are talks to reduce the severity of a US-China trade war.
The situation appeared to have worsened last week, but since then officials from both countries have spoken in favour of finding a compromise.
On the plus side, a US government spokesman has updated by saying;
‘Secretary Mnuchin called [Chinese Vice Premier] Liu He to congratulate him on the official announcement of his new role.
They also discussed the trade deficit between our two countries and committed to continuing the dialogue to find a mutually agreeable way to reduce it’.
Less positively, however, Chinese state publication the Global Times has provocatively declared that;
‘The US has been wielding sticks worldwide over the past year.
Washington needs to be taught a real lesson and such a lesson can only be taught by China, the world’s second-largest economy’.
Euro to US Dollar Exchange Rate Forecast: Risk of EUR/USD Volatility on German Ecostats
The Euro has struggled against the US Dollar today, but has a chance to recover when high-impact German data is released on 28th and 29th March.
Wednesday’s data will consist of the GfK consumer confidence score for April, while Thursday’s ecostats will be unemployment and inflation rate figures for March.
The GfK reading is expected to slow from 10.8 points to 10.7. This movement isn’t an assured outcome, however, so a surprise rise may boost the Euro.
More positively, Thursday’s German unemployment rate reading is forecast to fall from 5.4% to 5.3%, while inflation estimates are also predicted to rise.
This pair of positive data releases could boost the Euro to US Dollar exchange rate, unless any US trade news makes the US Dollar a more appealing prospect.
Euro to US Dollar gains could be made more likely by this week’s US data, as it could end up dragging the US currency down.
A finalised GDP growth rate figure out on Wednesday is projected to show a slowdown from 3.2% to 2.7%, which could greatly lower confidence in the US Dollar.
US personal spending levels may also disappoint on Thursday, but higher University of Michigan consumer confidence levels could minimise late-week USD losses.