EUR/USD Exchange Rate Unmoved by Data
The Euro to US Dollar (EUR/USD) exchange rate is mostly rangebound this afternoon as markets digest the latest Eurozone and US Data.
At the time of writing the EUR/USD exchange rate is trading at around $1.1027, virtually changed from this morning’s opening rate.
Euro (EUR) Steady as German Inflation Accelerates
The Euro (EUR) is holding its ground this afternoon as markets react to Germany’s latest consumer price index (CPI).
According to data published by Destatis, headline inflation accelerated from 1.5% to 1.7% in January as expected.
This was the strongest reading of inflation since July and brings it closer to the European Central Bank’s (ECB) target rate of 2%.
Following its first policy meeting of 2020, the ECB reaffirmed its pledge to keep interest rates at record lows and maintain its quantitative easing programme, until inlfation in the Eurozone moves back within the bank’s target range.
The robust German CPI figures help to offset a gloomy Eurozone business confidence reading earlier in the session, which saw the sentiment index come in below expectations this month after being revised down to a new five-year low in December.
US Dollar (USD) Flat as GDP Prints In line With Expectations
The US Dollar (USD) is also trading in a narrow range this afternoon in response to the latest US GDP estimate.
Today’s figures confirmed US the US economy continued to expand at a healthy 2.1% in the last quarter of 2019, mirroring growth in the third quarter.
The growth rate was sustained mostly by consumer spending and federal government spending, which offset declines in private inventory investments and imports.
Demand for the US Dollar also appears to have cooled somewhat from earlier in the session, when market jitters over the coronavirus outbreak in China bolstered the appeal of the Safe-haven currency.
EUR/USD Forecast: Will a Surprise Acceleration in Eurozone GDP Boost the Euro?
Looking ahead to the end of the week, the Euro to US Dollar (EUR/USD) exchange rate may find some support with the release of the Eurozone’s latest GDP figures.
Market consensus is that growth in the bloc will have continued to expand at 0.2% in the fourth quarter.
However, some analysts are optimistic on the chances of growth having ticked higher at the end of 2019, on the back of easing global trade tensions.
Further buoying the single currency may be the Eurozone’s CPI figures, if headline inflation accelerated in line with expectations this month.
Meanwhile, the publication of the Federal Reserve’s favoured measure of inflation, the PCE price index could strengthen the US Dollar tomorrow afternoon if price growth continued to trend back towards the Fed’s target range in December.