The US Dollar is expected to be shifted dramatically at the start of 2017, while the next big Euro-influencing event does not have a definite timeframe attached to it.
US Dollar Euro Gains Recorded after ECB Extended QE Program
The US Dollar Euro exchange rate closed trading strongly on Friday, thanks to a major surge in the University of Michigan consumer sentiment report for December.
Seemingly linked to President-Elect Trump’s plans to invest heavily in infrastructure, the higher-than-forecast rise from 93.8 to 98 on the month raised demand for the USD EUR exchange rate considerably.
On the Euro’s side, losses were widespread and persistent, owing to Italy’s oldest bank, Monte dei Paschi, seeing plunging share prices amid fears that the bank will go under on debt issues.
USD EUR Exchange Rate Outlook: Major Volatility Expected on Trump Inauguration Next Year
Looking to the future, after the New Year celebrations have faded away, the US Dollar is set to be rocked in late January by a political event of seismic proportions.
This is, of course, the ascension of Donald Trump to become the 45th President of the United States on January 20th.
While Trump has been somewhat measured since winning the election compared to his campaign persona, there are still credible fears that the President-Elect will try to enact some of his more radical policies soon after taking office.
Among these are the scheme to build a huge and economically eye-watering border wall with Mexico, as well as the plan to deport millions of illegal immigrants on his first day of taking charge.
While many voted Trump into power on these promises, actually sticking to them could shatter confidence in the US economy, which would send the USD EUR exchange rate tanking as a result.
Euro US Dollar Exchange Rate Forecast: Italian Banking Respite could Provide Welcome EUR Boost
The unstable state of the Italian banking sector has seen investor confidence in Italy, and the Eurozone by extension, tumble.
While a clear, clean solution to the massive debt currently weighing on Italy’s banks is not immediately apparent, any signs that relief is in sight could well give investors a shot of confidence in the arm on the matter.
Conversely, if the Italian Government seems to be hanging its banks out to dry, then Italy may well find itself facing similar problems to Greece with rushes on banks and a mass exodus of currency throwing the economy into disarray.
Recent Interbank Exchange Rates
At the time of writing, the US Dollar Euro (USD EUR) exchange rate was trending in the region of 0.94 and the Euro US Dollar (USD EUR) exchange rate was trending in the region of 1.05.