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Euro to US Dollar Exchange Rate Recovers on US Political Uncertainty
Published: 30 Nov at 5 PM Tags: Euro Exchange Rate, Dollar Exchange Rate, Currency Exchange, Euro Crisis, UK, Exchange Rates, Inflation,
Despite some underwhelming Eurozone inflation results and strong US economic data in recent sessions, the Euro to US Dollar exchange rate recovered from its worst levels on Thursday and trended closer to the level of 1.19.
Due to stronger ‘Greenback’ demand, EUR/USD has spent most of this week lower than the week’s opening level of 1.1932. The pair hit a weekly low of 1.1815 on Thursday, but recovered to around 1.19 towards the end of the day.
The Eurozone has continued to see relatively strong data, and saw support on Thursday despite the latest inflation projections falling short of forecasts.
Analysts predicted that Eurozone inflation would rise from 1.4% to 1.6% year on year in November, but the November inflation projection came in at just 1.5%.
Still, the slowing rate of inflation did line up with the European Central Bank’s (ECB) expectation for slowing inflation in 2018, and the core inflation rate projection remained at 0.9%. As a result, the Euro outlook was largely unchanged.
Demand for the shared currency was also supported slightly by October’s Eurozone unemployment rate report, which unexpectedly improved to 8.8% - its best rate in nine years.
The US Dollar, on the other hand, saw volatility on Thursday afternoon as political developments made investors anxious.
Reports emerged that US President Donald Trump was planning to replace US Secretary of State Rex Tillerson with CIA chief Mike Pompeo.
Amid attempts to pass US tax cuts through the Senate in Congress, more uncertainty from the Trump administration made the US Dollar less appealing.
This was despite market hopes that tax cuts would see success in Congress, as well as recently strong US data.
As the Republican Party tax bill is set to be discussed before the end of the week and potentially even voted on on Friday, it has the potential to influence Euro to US Dollar exchange rate movement before markets close for the week.
On top of that, Eurozone manufacturing PMI data from Markit, and US manufacturing data from ISM could also inspire some EUR/USD movement.
Overall though, the Euro is unlikely to drive EUR/USD trade much in the coming sessions and investors will take focus on developments on US tax cuts.
Euro investors are now likely to look ahead to next Thursday, when the Eurozone’s final Q3 Gross Domestic Product (GDP) results will be published. Next week will also see the publication of key US PMI data and job market stats from November.
Due to stronger ‘Greenback’ demand, EUR/USD has spent most of this week lower than the week’s opening level of 1.1932. The pair hit a weekly low of 1.1815 on Thursday, but recovered to around 1.19 towards the end of the day.
The Eurozone has continued to see relatively strong data, and saw support on Thursday despite the latest inflation projections falling short of forecasts.
Analysts predicted that Eurozone inflation would rise from 1.4% to 1.6% year on year in November, but the November inflation projection came in at just 1.5%.
Still, the slowing rate of inflation did line up with the European Central Bank’s (ECB) expectation for slowing inflation in 2018, and the core inflation rate projection remained at 0.9%. As a result, the Euro outlook was largely unchanged.
Demand for the shared currency was also supported slightly by October’s Eurozone unemployment rate report, which unexpectedly improved to 8.8% - its best rate in nine years.
The US Dollar, on the other hand, saw volatility on Thursday afternoon as political developments made investors anxious.
Reports emerged that US President Donald Trump was planning to replace US Secretary of State Rex Tillerson with CIA chief Mike Pompeo.
Amid attempts to pass US tax cuts through the Senate in Congress, more uncertainty from the Trump administration made the US Dollar less appealing.
This was despite market hopes that tax cuts would see success in Congress, as well as recently strong US data.
As the Republican Party tax bill is set to be discussed before the end of the week and potentially even voted on on Friday, it has the potential to influence Euro to US Dollar exchange rate movement before markets close for the week.
On top of that, Eurozone manufacturing PMI data from Markit, and US manufacturing data from ISM could also inspire some EUR/USD movement.
Overall though, the Euro is unlikely to drive EUR/USD trade much in the coming sessions and investors will take focus on developments on US tax cuts.
Euro investors are now likely to look ahead to next Thursday, when the Eurozone’s final Q3 Gross Domestic Product (GDP) results will be published. Next week will also see the publication of key US PMI data and job market stats from November.
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Source: moneytransfer.co.uk