Euro US Dollar (EUR/USD) Exchange Rate Down as Traders Await No-Confidence Vote
The Euro US Dollar (EUR/USD) exchange rate dipped today and is currently trading in the region of $1.1395 on the inter-bank market.
EUR slipped against USD this morning after the release of Germany’s harmonised CPI figures for December, which confirmed its estimate at 1.7% – the slowest gain in eight months.
Italy’s Consumer Price Index for December also printed lower than expected.
EUR has also been affected by news of the UK Brexit vote, with Guy Verhofstadt, the European Parliament’s Brexit Coordinator, tweeting:
The UK Parliament has said what it doesn’t want. Now is the time to find out what UK parliamentarians want. In the meantime, the rights of citizens must be safeguarded. #Brexit
— Guy Verhofstadt (@guyverhofstadt) January 15, 2019
Although Euro investors have been disappointed by the defeat of May’s Brexit deal last night, some believe that this may reduce the chances of the UK leaving the EU.
With the increased possibility of a second-referendum, this may potentially see a turn of events in favour of remaining in the EU, which has provided a boost to the Euro.
US Data Due out Today Likely to Drive EUR/USD
Today will see a raft of US data stats, although these are expected to leave the US Dollar relatively unmoved, with the most significant publication being the US Import Price Index for December, which is expected to decrease.
If US import and export prices decrease this could affect the likelihood of a rate hike from the Federal Reserve, with concerns over a slowing US economy indicating a tendency towards deflation.
Also today will see the publication of the Fed’s Beige Book report which gives an overall indicator of US economic growth.
USD/EUR Exchange Rate Rises Despite Ongoing Partial US Government Shutdown
The US Dollar gained on the Euro today despite the ongoing partial US government shutdown generally holding back the ‘Greenback’.
Meanwhile, the US Dollar has been benefiting slightly from signs of a slowing Chinese economy, although the safe-haven status is slipping as tensions remain between President Donald Trump and the House of Representatives over funding for the Mexican border wall.
However, trade tensions between the US and China could decrease, negatively affecting the US Dollar, with Andy Rothman, a former Head of Macroeconomics at the US Embassy in Beijing, commenting:
‘[T]here is no reason for the US to go back and put more tariffs in place, as long as progress is being made towards a deal. . . It is rare that a trade negotiation gets finished on time and President [Donald] Trump can extend the deadline.’
EUR/USD Forecast: Euro Could Rise on Positive CPI Figures
EUR investors will be looking ahead to tomorrow’s publication of the Eurozone’s yearly Consumer Price Index, with any signs of an increase potentially buoying the single currency against the Pound.
USD investors, meanwhile, will be looking ahead to the publication of tomorrow’s employment figures, with the release of the continuing jobless claims for January expected to increase.
These will also be followed by the US initial jobless claims figures which are also expected to increase, potentially strengthening the EUR/USD exchange rate.