Euro US Dollar (EUR/USD) Exchange Rate Boosted as US Reaches Border Security Compromise
The Euro US Dollar (EUR/USD) exchange rate is up today and is currently trading around $1.1296 on the inter-bank market.
The Euro (EUR) has gained on the US Dollar (USD) despite US political tensions easing after a border security deal was agreed – in principle – between the Democrats and the Republicans.
Richard Shelby, a Republican Senator, commented:
‘We got an agreement on all of it… Our staffs are going to be working feverishly to put all the particulars together. We believe that if this becomes law, it’ll keep open the government.’
Although this has calmed some USD investors’ fears of a possible government shutdown on Friday, many still remain cautious after President Donald Trump hit back against the Democrats’ limitations on the budget for the Mexican border wall, saying:
‘We’re building the wall anyway.’
There are no significant US economic data releases today, with many ‘Greenback’ investors focusing on political developments as the deal between the White House and Congress has yet to be fully confirmed between the two parties.
The Euro, meanwhile, benefited from the publication of Portuguese CPI figures for January, which increased above expectation to 0.5%.
Euro US Dollar (EUR/USD) Exchange Rate Rises despite Shaky Eurozone Confidence
Today saw Jens Weidmann, the President of Bundesbank, deliver a speech in which he warned that the Eurozone was not entirely immune from a possible crisis, commenting:
‘Certain issues like the lack of credibility of fiscal rules or the harmful sovereign-bank nexus still have to be adequately addressed…
At the end of the day, it could become more and more difficult for the European Central Bank to focus on its promise of a stable currency.’
Many EUR traders are remaining wary due to ongoing indications of a slowing Eurozone economy, and are remaining particularly jittery over any dovish sounds made by European banks.
This has been exacerbated by comments made by the chairman of Eurozone finance minister, Mario Centeno, who commented ahead of yesterday’s Eurogroup meeting:
‘We know there is a temporary slowdown in our economies. We also know that most of the risks, as the Commission pointed out, are political risks, which call for us politicians to act.’
Euro to US Dollar (EUR/USD) Exchange Rate Forecast: ‘Greenback’ Could Rise on Positive CPI Figures
EUR investors will be looking ahead to tomorrow’s Eurozone’s industrial production figures for December, which are expected to decrease.
USD traders, meanwhile, will be looking ahead to the publication of the US CPI – excluding food and energy –figures for January tomorrow; with any signs of an increase providing some much-needed uplift for the ‘Greenback’.
The EUR/USD exchange rate, however, is likely to be influenced by political developments this week, with the US potentially reaching a deal over border security and preventing another government shutdown, and the on-going concerns over the UK’s Brexit impasse still weighing on the single currency.