The Euro to US Dollar (EUR/USD), Euro to Canadian Dollar (EUR/CAD), Euro to British Pound (EUR/GBP), Euro to Russian Ruble (EUR/RUB) and Euro to Malaysian Ringgit (EUR/MYR) exchange rates were all trending lower during Thursday’s European session while the Euro to Swiss Franc (EUR/CHF) exchange rate recorded gains.
The Russian Ruble climbed by 0.2% versus the US Dollar (RUB/USD) to 61.83 on Thursday before Russia’s main stock exchange announced it would be ceasing trading for an hour. The announcement came without explanation and some speculate that the halt could be accredited to technical difficulties after the recent January 12th shutdown.
The Ruble had strengthened as a result of climbing oil prices, with black gold reaching over $60 per barrel. However, the European Central Bank (ECB) is expected to make announcements regarding monetary policy and the upcoming quantitative easing (QE) programme which could influence both the Euro and the Ruble (EUR/RUB).
Analyst Anastasia Sosnova stated: ‘Players on the market are in a state of impatience, awaiting publication of the results of the ECB meeting. A positive factor for Russian market participants is the fact that Brent continues to trade in the range $60-63 per barrel.’
Meanwhile, the Malaysian Ringgit has also declined in the latter six-months as the price of oil has tumbled by around 50%. The Ringgit holds the title of Asia’s worst performing currency within the six-month period and could remain so until black gold stabilises.
However, Bank Negara Malaysia kept interest rates at 3.25% for its fourth consecutive monetary policy announcement as the softer currency limits central bank actions.
Analyst Weiwen Ng commented: ‘The risk between growth, inflation and financial stability, they are all finely balanced. The base case is for Bank Negara to remain on hold for the rest of 2015.’
The Canadian Dollar has also been a particular victim of oil price declines and the Bank of Canada (BOC) had to implement a 25 basis point cut to interest rates last month. However, this week the BOC kept rates unchanged and offered the Canadian Dollar the opportunity to rally.
Economist Avery Shenfeld commented: ‘We’re no longer looking for another rate cut.’
The ‘Loonie’ could be in for some movement later in Thursday’s session with the release of the Canadian Ivey Purchasing Managers Index (PMI).
The Pound and the Euro are both under central bank pressure on Thursday with the Bank of England (BoE) expected to release its latest interest rate decision and the European Central Bank (ECB) holding a press conference detailing its highly anticipated quantitative easing programme.
The Bank of England is expected to leave rates unchanged for yet another month since the initial 0.50% benchmark was set in March 2009. However, the central bank has been gearing up to be more hawkish as it suggests ‘more likely than not’ interest rate hikes will occur in the near future.
Friday could be another day of influence for British Pound trading with the Bank of England’s Inflation Target released.
The US Dollar is also preparing for Friday when US Change in Non-Farm Payrolls and Unemployment Rate stats emerge. Joblessness in the US is expected to decline from 5.7% to 5.6% and could be a major factor of movement for many currencies.
Favourable labour market data would suggest the Federal Reserve was closer to hiking rates—a much anticipated move by many investors.
The Swiss Franc sank when the Swiss Finance Minister suggested that a new Euro to Swiss Franc (EUR/CHF) floor should be ‘considered’.
Bloomberg reported: ‘Confidence paper signed by Swiss Finance Minister Eveline Widmer-Schlumpf discussed in govt last week said that new minimum exchange rate should be “considered”. Handelszeitung reports in press release of article to be published Thursday.’
Euro Exchange Rate Forecast: EUR/CHF, EUR/USD, EUR/GBP, EUR/RUB, EUR/CAD, EUR/MYR
The Euro exchange rate is consistently trading under the dark cloud of Greek negotiations which threaten to tip the single currency over at any time.
In addition, Thursday’s European Central Bank (ECB) press conference has already gathered protestors as investors eagerly await news of the central bank’s QE programme.
Industry expert David Madden commented: ‘Central banks have been the driving force behind the booming stock markets over the past few years and now it is the ECB’s turn to flood the financial system with money.’
The Euro could be in for some additional movement on Friday with the release of Eurozone Gross Domestic Product (GDP).
The Euro to Malaysian Ringgit (EUR/MYR) exchange rate is trading in the region of 4.0267. The Euro to British Pound (EUR/GBP) exchange rate resides at 0.7253. The Euro to US Dollar (EUR/USD) exchange rate reaches 1.1052. The Euro to Canadian Dollar (EUR/CAD) exchange rate is hovering at 1.3721. The Euro to Russian Ruble (EUR/RUB) exchange rate is fetching 68.1347. The Euro to Swiss Franc (EUR/CHF) exchange rate is trending in the region of 1.0705.