After the EUR USD exchange rate struck 1.08 earlier in the week the Euro has been trading tightly against the US Dollar. The pairing could extend its recent rally if it looks like traders are losing faith in the wild promises of US President Donald Trump.
The latest post-Brexit related information has been the news that UK airlines may have to migrate to continental Europe in order to continue operating.
If it appears that the EU could also suffer economic drawbacks from seeing the UK leave its membership, then the Euro (which is widely used across the EU) may depreciate against the US Dollar.
Looking ahead to future influencers of the US Dollar, Donald Trump remains a central point of interest for traders.
Trump’s clashes with Congress so far have been limited to a Congressional Budget Office (CBO) analysis of his proposed affordable healthcare replacement, dubbed ‘Trumpcare’.
With the CBO criticising the proposal and stating that it would exclude more people from affordable care, questions have been more broadly raised about just how viable Trump’s plans are.
Passing major bills requires approval in the US House of Representatives and the Senate; Republican as well as Democrat officials have voiced opposition to Trump’s radical proposals, which lowers their chances of success and depletes US economic confidence to boot.
This means that the US Dollar is likely to be pushed down further in the future, especially so if Trump’s bigger plans like building a border wall and spending trillions on infrastructure also meet significant opposition.
Making this outcome a possibility has been Trump’s recent assertion that if Republicans refuse to back his bills, they could end up losing their seats in the 2018 midterm elections.
Such a tone has likely done little to endear Trump to his critics and makes it increasingly likely that struggles over policy approval will become a longstanding hallmark of the Trump presidency.
Recent Interbank Euro US Dollar Exchange Rates
At the time of writing, the Euro to US Dollar (EUR USD) exchange rate was trading at 1.08 and the US Dollar to Euro (USD EUR) exchange rate was trading at 0.92.