EUR/USD Exchange Rate Down 0.2%, German Economic Sentiment Improves Slightly
The Euro US Dollar (EUR/USD) exchange rate fell 0.2% today to trade in the region of $1.1289, despite the German ZEW survey of economic sentiment improving slightly to ‑13.4.
The Eurozone’s economic sentiment index for February also improved at -16.6 – although this failed to provide any uplift for the single currency.
Achim Wambach, the President Professor at ZEW, remained pessimistic, saying:
‘For the next six months, the financial market experts in our survey do not expect any improvement.’
This was further aggravated by disappointing Italian year-on-year industrial orders figures for December, which came in considerably below forecasts.
The US Dollar, meanwhile, is being increasingly wracked by political volatility following President Donald Trump’s declaration of a national emergency over illegal immigration at the Mexican border.
With no significant US data releases today, many ‘Greenback’ investors will be focusing on US political developments instead.
US Dollar Euro (USD/EUR) Exchange Rate Rises despite US Political Volatility
The US Dollar has advanced against the Euro today despite the news that 16 states, led by a court in California, have filed a lawsuit against the Trump administration over his decision to declare a national emergency.
A group statement put together by the various states – and which forms the complaint against Donald Trump – says:
‘[The various states] bring this action to protect their residents, natural resources, and economic interests from President Donald J. Trump’s flagrant disregard of fundamental separation of powers principles engrained in the United States Constitution.’
Many USD traders are awaiting developments around the US-China trade talks in Washington, and tensions have further heighted today following reports that Chinese tech giants like Huawei could be perceived as a cybersecurity threat to the US.
Ren Zhengfei, the founder of Huawei, hit back against the US, saying:
‘There’s no way the US can crush us… The world cannot leave us because we are more advanced. Even if they persuade more countries not to use us temporarily, we can always scale things down a bit.’
EUR/USD Forecast: Euro Could Firm on Positive German PPI Figures
The EUR/USD exchange rate will likely remain sensitive to political developments this week and developments in the US/China trade talks.
However, better than forecast German PPI figures could benefit the Euro tomorrow, while the US Dollar could come under pressure if the minutes from the Federal Open Market Committee policy meeting prove dovish in tone.