Euro to US Dollar (EUR/USD) Exchange Rate Trends Slightly Higher before US Data
The Euro to US Dollar (EUR/USD) exchange rate gained by over 0.2% on Wednesday ahead of the release of the US Housing Starts and Building Permits reports.
Speculation surrounding tomorrow’s European Central Bank (ECB) interest rate announcement helped the Euro edge higher against several of its other main counterparts.
The EUR/USD pairing is trading in the region of 1.1574
EUR/USD Exchange Rate Advances
The Euro to US Dollar (EUR/USD) exchange rate returned to trending around the day’s opening levels as Tuesday’s European session continued and the Eurozone’s ZEW economic sentiment survey impressed.
ZEW’s economic sentiment measure for the Eurozone advanced from 31.8 to 45.2 while the gauge for Germany jumped from 34.9 to 48.4.
The Euro to US Dollar (EUR/USD) exchange rate is currently trading in the region of 1.1589
The Euro to US Dollar (EUR/USD) exchange rate shed around -0.2% early in the European session.
The pairing was trading in the region of 1.1581 following the publication of Germany’s Producer Price Index.
Euro to US Dollar (EUR/USD) Exchange Rate Stumbles after German PPI, IMF Revisions
With US markets closed for Martin Luther King Jr. Day on Monday, the Euro to US Dollar (EUR/USD) exchange rate spent much of the local session trending in a narrow range.
On Tuesday EUR/USD slipped in response to a below-forecast German Producer Price Index.
Producer prices fell by -0.7% on the month in December rather than dipping the -0.4% expected. Stagnation was registered in November.
On the year, producer prices fell -1.7% – a steeper annual drop than the -1.4% anticipated.
The Euro to US Dollar (EUR/USD) exchange rate fell to a low of 1.1566
Demand for higher-risk currencies like the Euro was also reduced after the International Monetary Fund cut its global growth forecasts for this year and next.
The US Dollar to Euro (USD/EUR) exchange rate hit a high of 1.1602
The IMF cut its projection for expansion in 2015 to 3.5% and its expectation for 2016 to 3.7%.
According to the BBC; ‘The downgrade to the forecasts comes despite one major boost for the global economy – the sharp fall in oil prices, which is positive for most countries. The IMF expects that to be more than offset by negative factors, notably weaker investment.’
‘That in turn reflects diminished expectations about the growth prospects for many developed and emerging economies over the next few years. If business expects weaker growth, there is less opportunity to sell goods and services and so less incentive to invest.’
Euro to US Dollar (EUR/USD) Exchange Rate Forecast
In the hours ahead the Euro to US Dollar (EUR/USD) exchange rate is likely to experience fluctuations as a result of the ZEW Economic Sentiment surveys for the Eurozone and Germany, the currency bloc’s largest economy.
The German measure of economic sentiment is expected to climb from 34.9 to 40 in January.
Similarly, the Current Situation survey is believed to have advanced from 10 to 13 this month.
Additional EUR/USD movement could be inspired by the NAHB Housing Market Index.
The measure of housing construction is expected to print at 58 following the previous month’s reading of 57.
Federal Reserve official Jerome Powell is also scheduled to speak in Washington. If he makes any reference to current or future US fiscal policy it could inspire some ‘Greenback’ shifts.
The Euro to US Dollar (EUR/USD) exchange rate was trending in the region of 1.1583
The US Dollar to Euro (USD/EUR) exchange rate was trending in the region of 0.8632
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending in the region of 1.3041
The Euro to Pound Sterling (EUR/GBP) exchange rate was trending in the region of 0.7666