The Euro US Dollar (EUR USD) exchange rate jumped by nearly a cent in trade today as US markets slipped in reaction to a rise North Korean tensions.
US Dollar (USD) Tumbles on North Korea Worries
The US Dollar came under considerable pressure today as North Korea conducted yet another missile test, this time launching a ballistic missile over Japan in a move that shocked the international community.
Japanese Prime Minister Shinzo Abe called the test an “unprecedented” threat to his country and said he had spoken with US President Donald Trump about placing additional pressures on Pyongyang in retaliation.
However while the UN Security Council is set to convene later today in response to the latest launch, analysts suggest that China may butt heads with the US over the issue as Chinese officials suggest that the recent US and South Korea military drills were partly to blame for recent tensions.
Chinese Foreign ministry spokeswoman Hua Chunying also said that placing further sanctions on the secretive nation is unlikely to solve the problem, saying;
‘After so many rounds and vicious cycles, do they feel they are nearer to peaceful settlement of the issue?’
However also weakening the US Dollar today were worries over the impact of Hurricane Harvey’s impact on the US economy as areas of Texas were battered by the storm over the weekend, with Houston facing catastrophic flooding and suggestions that repair costs could rise as high as $100bn.
Euro (EUR) Strengthened by Upbeat Consumer Confidence
Meanwhile the Euro was strengthened earlier this morning by the release of Germany’s latest Consumer Confidence data.
According to figures released by the GfK institute, consumer sentiment has risen for the fifth consecutive month as its confidence index climbed from 10.8 to 10.9 in September.
Analysts attributed the rise to Germany’s recent employment data, with consumers increasingly upbeat as record low unemployment figures and robust wages makes households more confident in their economic outlook.
EUR USD Forecast: Markets Await Tax Reform Speech from Trump
Looking ahead the EUR USD exchange rate will likely be driven by Donald Trump’s tax reform speech tomorrow, with the US Dollar likely to plummet again if market reception is negative.
Meanwhile the Euro may rally again on Wednesday as the Eurozone releases its Business confidence figures, with economists forecasting that the recent run of upbeat data from the bloc will cause business sentiment to climb in August.
Current Interbank Exchange Rates
At the time of writing the EUR USD exchange rate was trending around 1.2013 and the USD EUR exchange rate was trending around 0.8321.
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