The Euro has been tight against the US Dollar today after the earlier GDP growth rate figures, which showed quarterly Eurozone growth revised up to 0.4% in Q4 and a posting of 1.7% annually.
US news has seen the trade deficit expand in January to a 5-year high; whether this affects the Fed’s likelihood to raise the US interest rate remains to be seen.
[First Published 10:09 March 7th 2017]
Remarks from EU leaders on Monday had a supportive effect on the EUR USD exchange rate and the Euro recorded further gains as the week continued.
Addressing what has long been a contentious issue among European Union (EU) members, the leaders of France, Germany, Italy and Spain have all spoken in support of a ‘multi-speed’ Europe.
Seen as a measure to maintain unity and stability among EU members, French President Francois Hollande emphasised that different EU states could grow faster in certain areas compared to other countries.
Adding her voice was German Chancellor Angela Merkel;
‘We need to have the courage for some countries to go ahead if not everyone wants to participate. A Europe of different speeds is necessary, otherwise we will probably get stuck. If Europe gets stuck and doesn’t develop further, then this work of peace may run into danger faster than one might think’.
The speeches may broadly reduce concerns about ‘ever closer union’ in the EU, something that has historically been a sticking point for nations that wish to benefit from EU membership but not bind themselves too closely to the multinational entity.
Other Eurozone news has been less positive, with German factory orders falling by -7.4% in January.
The next major Euro movement could come shortly, as high-impact GDP figures are due imminently.
These are set to show a Q4 quarterly rise and an annual reprint at 1.7%, which might further raise the value of the Euro.
The US Dollar’s poor performance today comes after the revelation of the planned replacement to the ‘Obamacare’ health care act, formed after weeks of speculation and promises from Government officials.
The Republican-sourced plan aims to ‘restore health care choices and affordability back to the American people’, but has been roundly criticised by Democrats due to a perceived hike in health care costs as well as a reduced number of applicable beneficiaries.
The day’s major US news is January’s trade balance, due this afternoon. The US Dollar could worsen on the result given that a deficit expansion from -44.3bn to -48bn is forecast.
Current EUR USD Interbank Exchange Rates
At the time of writing, the Euro US Dollar (EUR USD) exchange rate was trading at 1.05 and the US Dollar Euro (USD EUR) exchange rate was trading at 0.94 today.