As a new week got underway the Euro continued trading in a slightly stronger position against the US Dollar.
On Friday the US currency lost some appeal as the University of Michigan consumer confidence measure declined unexpectedly, and after the weekend the ‘Greenback’ was holding steady against its major rivals but remained slightly softer against peers like the Euro and Pound.
The US Dollar also fell to a three-month low against the Yen as Ukraine and Vietnam inspired risk aversion drove investors towards the safe-haven Asian asset.
Meanwhile, speculation surrounding the upcoming publication of minutes from the most recent Federal Open Market Committee meeting also took a toll.
Given the dovish stance adopted by Fed Chairwoman Janet Yellen, the minutes are likely to reiterate the central bank’s intentions of leaving interest rates at record lows for the foreseeable future.
Consequently, the Euro to US Dollar exchange rate was slightly higher despite ongoing speculation surrounding the prospect of the European Central Bank bringing in additional stimulus in June and a less-than-impressive construction output report for the Eurozone.
The construction output data showed a monthly drop of 0.6 per cent and a yearly gain of 5.2 per cent.
This was down from an increase of 0.4 per cent in February, month-on-month, and a jump of 7.5 per cent year-on-year.
At the last ECB policy meeting President Mario Draghi all but promised that further stimulus would be brought in next month.
While investors are debating the likelihood of negative interest rates or bond buying schemes being introduced, one ECB official did recently comment that ‘The probability that the Governing Council will act already at its next meeting in June has risen significantly [and policies include] unconventional measures as well as conventional monetary policy instruments to effectively curtail the risks of low inflation over a long period of time.’
Tomorrow several factors could inspire movement in the Euro to USD pairing, including German producer price data and speeches given by two Federal Reserve officials.
Minutes from the latest FOMC meeting will be published on Wednesday and the week’s big Eurozone news, German growth figures, is due out on Friday.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
Euro,
Euro,
Euro,
Euro,
[/table]
