The Euro has appreciated against most of its regular peers today, although this is partly attributable to US Dollar weakness over tax concerns.
- EUR USD rate rises to 1.1806 – USD EUR trades down at 0.8468
- German surveys show mixed confidence readings – Economic optimism takes a hit
- US Dollar dips ahead of key tax vote – Trump talks up rivalry with China
- Will Euro rise on CBI trade stats? – US Dollar faces high volatility on tax vote
The US Dollar has dropped against the Euro and made mixed movement elsewhere, ahead of a crucial Republican vote on national tax reform.
EUR/USD Exchange Rate Rises despite Mixed Confidence Scores
The Euro has traded higher against the US Dollar today, thanks to a better-than-expected reading for current economic conditions.
The IFO current conditions stat for Germany has risen from 124.5 points to 125.4, instead of hitting the smaller estimated figure of 124.7.
Elsewhere, however, German economic expectations have dipped, as has the perception of the current business climate in the country.
The silver lining to this cloud is that the declines were only minimal, meaning that overall German confidence remains relatively high.
These mixed readings are down to the collapse of German coalition talks, which have set back the formation of a post-election government by several months.
Tensions over Tax Vote Limit US Dollar to Euro Trading
The US Dollar has been an unappealing currency today, having dropped against the Euro and a number of other peers.
This deterioration comes before a crucial vote on tax reform, seen by some as the last chance to restore confidence in the Republican Party.
The jury is still out about whether the reforms will really benefit the US’s worst-off, but hopes are still high for some kind of progress in national policymaking.
Elsewhere, the US Dollar has also been knocked by President Donald Trump’s latest declarations.
Trump has been discussing Russia and China, labelling them as explicit rivals to US ‘power, influence and interests’.
This bodes poorly for future international relations, as it follows Trump’s pattern of alternating between criticising and praising international governments.
EUR/USD Exchange Rate could Turn Turbulent over Tax Vote
The Euro might move against the US Dollar later in the week, after a pair of confidence measures are released.
The Eurozone consumer confidence flash is out on Thursday, while a German consumer confidence reading is out on Friday.
Both readings are considered to be ‘high-impact’, but expectations have been mixed for the outcomes.
If the Eurozone-wide reading prints at 0 points as expected and the German confidence estimate rises as expected, the Euro could ultimately be devalued.
There isn’t much US economic news out today, but the US Dollar could still turn turbulent as the Republican Party votes on controversial tax reform plans.
This ballot is the final hurdle before the tax changes can start being made into law, so traders and politicians are understandably tense.
The reforms are unlikely to be supported by any Democrats, so Republicans need a clean sweep of ‘yes’ votes from their slim majority in the US Senate.
Passing the vote would have a strong symbolic effect as the Republicans failed to repeal and replace the Affordable Care Act (ACA) earlier in the year.
For them to actually succeed in ratifying these sweeping tax plans, this could lead to a sharp rise in confidence about the US Dollar.
Current Interbank EUR USD Exchange Rates
At the time of writing, the Euro to US Dollar (EUR USD) exchange rate was trading at 1.1803 and the US Dollar to Euro (USD EUR) exchange rate was trading at 0.8470.
