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Euro to US Dollar Exchange Rate Climbs Despite Higher Federal Reserve Interest Rate Hike Bets
Published: 14 Feb at 5 PM Tags: Euro Exchange Rate, Dollar Exchange Rate, Currency Exchange, Swiss Franc Exchange Rate, Euro Crisis, UK, Exchange Rates, Inflation, Spain, France,
Despite some unexpectedly high US inflation data on Wednesday, the Euro to US Dollar exchange rate only saw a brief dip before trending near its daily highs towards the end of the European session. The Euro was supported by strong Eurozone growth data throughout the day.
Since opening the week at the level of 1.2253, EUR/USD has spent recent sessions climbing. While EUR/USD briefly dipped by over half a cent on Wednesday afternoon, the pair promptly recovered and touched on a weekly high of 1.2401 before European markets closed.
The Euro (EUR) has been appealing for most of the day despite the solid US data, as investors have digested news that Germany and the Eurozone saw the highest growth rates among G7 nations throughout 2017.
Wednesday saw the publication of Q4 Gross Domestic Product (GDP) projections for Germany, Italy and the Eurozone overall. Italian growth printed at 1.6% year-on-year as expected, while the Eurozone figure came in at the forecast 2.7%.
While Germany’s yearly growth rate failed to improve to the forecast 3.0%, it still came in with an impressive 2.9%. As a result, Germany took the top spot for 2017 growth among G7 nations while the Eurozone overall came in second.
With investors expecting strong Eurozone growth to continue in 2018, and the Eurozone’s December industrial growth results also beating expectations, the Euro has remained appealing.
The US Dollar, on the other hand, saw a brief surge in demand following the publication of Wednesday’s US ecostats.
January’s US Consumer Price Index (CPI) report was forecast to come in at 0.3% month-on-month and 1.9% year-on-year, but the results beat expectations at 0.5% and 2.1% respectively.
The core inflation rate also beat expectations, remaining at 1.8% despite being forecast to slip to 1.7%. The data caused markets to speculation that the Federal Reserve could ramp up its pace of US interest rate hikes in 2018.
However, the US Dollar only briefly benefitted from the data. Some analysts noted that it was too early to call the stronger inflation print a trend rather than a blip.
On top of this, the latest US retail sales results were disappointing. US retail sales were forecast to come in at 0.2% month-on-month in January but instead printed at -0.3%. The yearly figure slowed from 5.2% to 3.6%.
As the US data failed to give the US Dollar a prolonged boost in demand, the Euro to US Dollar exchange rate could still be on track to sustain gains this week.
Some more notable data will be published on Thursday which could influence some late-week movement in EUR/USD.
The latest unemployment rates from The Netherlands and France will be published, as well Spanish and Irish inflation results from January. The Eurozone’s December trade surplus update will be published too.
As for the US Dollar, most of this week’s most influential US ecostats have been published already but Thursday’s US jobless claims or industrial production stats may support the US Dollar if they impress.
Friday’s Michigan University consumer sentiment report could also influence US Dollar movement. However, amid the Euro’s resilient strength the Euro to US Dollar exchange rate could continue to edge higher regardless.
Since opening the week at the level of 1.2253, EUR/USD has spent recent sessions climbing. While EUR/USD briefly dipped by over half a cent on Wednesday afternoon, the pair promptly recovered and touched on a weekly high of 1.2401 before European markets closed.
The Euro (EUR) has been appealing for most of the day despite the solid US data, as investors have digested news that Germany and the Eurozone saw the highest growth rates among G7 nations throughout 2017.
Wednesday saw the publication of Q4 Gross Domestic Product (GDP) projections for Germany, Italy and the Eurozone overall. Italian growth printed at 1.6% year-on-year as expected, while the Eurozone figure came in at the forecast 2.7%.
While Germany’s yearly growth rate failed to improve to the forecast 3.0%, it still came in with an impressive 2.9%. As a result, Germany took the top spot for 2017 growth among G7 nations while the Eurozone overall came in second.
With investors expecting strong Eurozone growth to continue in 2018, and the Eurozone’s December industrial growth results also beating expectations, the Euro has remained appealing.
The US Dollar, on the other hand, saw a brief surge in demand following the publication of Wednesday’s US ecostats.
January’s US Consumer Price Index (CPI) report was forecast to come in at 0.3% month-on-month and 1.9% year-on-year, but the results beat expectations at 0.5% and 2.1% respectively.
The core inflation rate also beat expectations, remaining at 1.8% despite being forecast to slip to 1.7%. The data caused markets to speculation that the Federal Reserve could ramp up its pace of US interest rate hikes in 2018.
However, the US Dollar only briefly benefitted from the data. Some analysts noted that it was too early to call the stronger inflation print a trend rather than a blip.
On top of this, the latest US retail sales results were disappointing. US retail sales were forecast to come in at 0.2% month-on-month in January but instead printed at -0.3%. The yearly figure slowed from 5.2% to 3.6%.
As the US data failed to give the US Dollar a prolonged boost in demand, the Euro to US Dollar exchange rate could still be on track to sustain gains this week.
Some more notable data will be published on Thursday which could influence some late-week movement in EUR/USD.
The latest unemployment rates from The Netherlands and France will be published, as well Spanish and Irish inflation results from January. The Eurozone’s December trade surplus update will be published too.
As for the US Dollar, most of this week’s most influential US ecostats have been published already but Thursday’s US jobless claims or industrial production stats may support the US Dollar if they impress.
Friday’s Michigan University consumer sentiment report could also influence US Dollar movement. However, amid the Euro’s resilient strength the Euro to US Dollar exchange rate could continue to edge higher regardless.
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Source: moneytransfer.co.uk