The Euro was able to hold its ground after recent German PMIs declined slightly, though the week to come is expected to provide a clearer picture of how the major Eurozone economy is faring at present.
The US Dollar was knocked recently by another Fed interest rate freeze, though comments made at the time put a December interest rate hike firmly in the sights of investors.
Euro Stable despite Poor PMIs, US Dollar Steady before Fed Announcements
The Euro managed to advance against the US Dollar to a rate of around 1.12 during Friday’s trading session, although the gradual strengthening of the ‘Buck’ did limit this positive movement as the day progressed.
Eurozone data focused mainly on the September PMI flashes, which saw French figures rise but the German and Eurozone composite and services fall. More supportively, however, manufacturing results firmed in both major areas on the month.
The US Dollar made a progressive recovery against its rivals during Friday’s trading, thanks to the outcome of Thursday afternoon’s Kansas Fed manufacturing activity result, which rose from -7 points to 15.
This started the ball rolling on the renewed cycle of Fed rate hike speculation, where a cumulative number of positive US results will raise the odds of a December interest rate increase considerably.
Future Euro Predictions: Glut of Major German Data out Next Week
The coming week will be a vital one when it comes to forming an outlook on Germany’s economic performance, given that the recent PMI printings have seen both the composite and services PMI figures decline in their preliminary forms.
Monday morning will bring optimistically forecast Ifo confidence figures, while Tuesday’s contributions will be mixed-prediction retail sales results for August.
Wednesday and Thursday will bring the biggest weekly German announcements, respectively covering the Gfk consumer confidence result for October and September’s unemployment figures.
Confidence is predicted to decline marginally, while the unemployment rate has stagnation forecast at 6.1%.
US Dollar Outlook: Fed Rate Hike Possibility will Amplify Effect of Next Week’s Ecostats
While all US data out before December will technically have an impact on the odds of a December interest rate hike, the week to come has some high-impact announcements that may considerably raise the chances of such an outcome.
While forecasts have been broadly mixed, the August new home sales, September composite and services PMI flashes, August durable goods orders and Q2 finalised Q2 GDP growth rate results are all set to shift the US Dollar’s short-term value over next week.
Recent EUR USD Exchange Rates
At the time of writing, the Euro US Dollar (EUR USD) exchange rate was trending in the region of 1.1220 and the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.8916.
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