Euro to US Dollar (EUR/USD) Exchange Rate Tests Best Levels since March

Euro to US Dollar (EUR/USD) Exchange Rate Avoids Losses Ahead of US Inflation Report

Market demand for the Euro (EUR) has been limited in recent sessions, but despite this the Euro to US Dollar (EUR/USD) exchange rate has been able to avoid losses as the US Dollar (USD) continues to fall on economic and trade uncertainties.

After seeing impressive gains of over a cent last week, the EUR/USD rate has been trending closer to the level of $1.13.

The EUR/USD exchange rate saw a brief dip earlier in the week, but at the time of writing today was trending closer to its best levels since mid-March once again.

Demand for the Euro has been resilient despite lingering concerns regarding the health of the Eurozone economy.

For now, the pairing is unlikely to move from near its best levels as investors await comments from European Central Bank (ECB) officials and the latest US inflation report.

Euro (EUR) Exchange Rates Benefit from Rival Weakness amid Lack of Drive

Since last week’s European Central Bank (ECB) policy decision, Euro (EUR) exchange rates have seen some stronger support.

The ECB surprised investors by taking a less dovish tone than was expected on the health of the Eurozone economy, hiking its 2019 growth and inflation outlooks.

However, analysts remained anxious that the ECB was not being dovish enough when considering continued signs of weakness in the Eurozone economy.

Overall, the Euro remains resilient ahead of today’s speeches from ECB President Mario Draghi, with markets anticipating the possibility of further clarity on the bank’s Eurozone economic outlook.

With a lack of notable domestic news to provide direction, the Euro has instead been reacting to the strength of its rival the US Dollar.

US Dollar (USD) Exchange Rates Limp as Investors Anticipate Inflation Report

US Dollar (USD) exchange rates have been struggling since last week. US trade belligerence and signs of weaker data have led to higher Federal Reserve interest rate cut bets, which have been causing USD losses.

While the US Dollar briefly rebounded from its worst levels when markets opened this week, this was only due to hopes over improving US-Mexico trade relations.

Concerns about US-China trade relations and the US economy continue to persist, and it’s now widely expected that the Fed will cut interest rates at least once in the next year.

These factors are keeping pressure on US Dollar exchange rates, with investors hesitant to make any big moves on the US currency ahead of major US data due for publication in the coming sessions.

Euro to US Dollar (EUR/USD) Exchange Rate Could Hit Fresh Highs if US Data Disappoints

The Euro to US Dollar (EUR/USD) exchange rate is trending close to its best levels since March.

However, if comments from European Central Bank (ECB) President Mario Draghi indicate that the ECB could be more dovish than it indicated last week, the Euro could move away from its recent highs.

Following Draghi’s comments, market focus will turn to US Consumer Price Index (CPI) inflation data from May, due this afternoon.

If US inflation falls short of expectations, Fed interest rate cut bets will solidify and the US Dollar will remain weak.

Other data that Euro to US Dollar (EUR/USD) exchange rate traders will be focusing on in the coming days includes German inflation data tomorrow, and US retail sales results on Friday.

Josh Jeffery

Contact Josh Jeffery