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Euro to US Dollar Exchange Rate Forecast: Are EUR/USD Gains ahead on Eurozone GDP Data?

Euro Currency Forecast

The Euro (EUR) has continued to trade tightly against the US Dollar (USD) on the afternoon of 27th April.

This static EUR/USD exchange rate movement comes after disappointing Eurozone confidence readings for April.

Levels of business confidence and services sentiment fell during the month, while for other readings there was no real surge in optimism.

(First published 27th April, 2018)

Strong Eurozone GDP Growth Estimate could Trigger EUR/USD Exchange Rate Rise

The Euro (EUR) has struggled to advance against the US Dollar (USD) recently, but may be able to regain lost ground over the coming week.

There could be a EUR/USD exchange rate recovery on 2nd May, when high-impact Eurozone employment stats and GDP growth estimates are announced.

The current predictions are for no change in the jobless rate, but for year-on-year Q1 GDP growth to have accelerated compared to Q1 2017.

Forecast-matching Eurozone GDP growth could end up boosting the Euro to US Dollar (EUR/USD) exchange rate, due to trader relief about economic stability.

Will Eurozone Inflation Rate Flash Push EUR/USD Exchange Rate Higher?

Another data release which could raise demand for the Euro (EUR) in the coming week will be Eurozone inflation rate estimates, out on 3rd May.

The figures are predicted to show higher base and core year-on-year inflation in April, which might lead to the Euro firming against the US Dollar (USD).

Higher inflation contributes to greater odds of a European Central Bank (ECB) interest rate hike, although present levels of price growth remain below the ECB’s 2% target.

US Dollar to Euro (USD/EUR) Exchange Rate Volatility ahead on Fed Forecast and Jobs Data

As with the Eurozone, there will be a large amount of high-impact US economic data coming out in the week starting 30th April.

The two main events will be the Federal Reserve interest rate decision on 2nd May and non-farm payrolls data out on 4th May.

Current expectations are for the Fed to leave interest rates at 1.75% during May, but this doesn’t rule out USD/EUR exchange rate volatility on the day.

If Fed policymakers suggest that higher US interest rates could be incoming in the near-future, the US Dollar could firm against the Euro.

Greater gains could be ahead if the non-farm payrolls reading (measuring new jobs added to the economy) shows an as-forecast rise for April.

Will USD/EUR Exchange Rate Fluctuate on US PMI and Unemployment Rate Figures?

While not as high-impact as some of next week’s US data releases, the upcoming US PMI and unemployment rate data could also influence the USD/EUR exchange rate.

Measures of US manufacturing and non-manufacturing PMI activity will be out on 1st May and 3rd May.

The manufacturing reading has predicted to rise by Markit analysts, but slower activity is estimated by ISM.

ISM are also forecasting slower non-manufacturing activity later in the week, so pessimism may win out and lower confidence in the US Dollar.

Any losses could be short-lived as on 4th May, as well as a rising non-farm payrolls reading, the unemployment rate for April could drop from 4.1% to 4%.

This stacking of potentially supportive data might make a late-week Euro to US Dollar (EUR/USD) exchange rate rise extremely difficult.