Euro to US Dollar Exchange Rate Avoids Significant Losses as Investors Await Data and Fed
The Federal Reserve will finally hold its anticipated July policy decision tomorrow, and as Euro to US Dollar (EUR/USD) exchange rate investors await the news they are hesitant to move much on either major currency. The pair has avoided losses despite a lack of strong Eurozone data.
Following last week’s tumble from the interbank level of 1.12 to 1.11, EUR/USD has seen very little notable movement since markets opened yesterday.
EUR/USD briefly dipped to near last week’s 2019 worst level and remains less than half a cent above it, near the week’s opening levels, at the time of writing.
The Euro (EUR) outlook has been dampened by concerns over the Eurozone manufacturing sector, while speculation over how dovish the Federal Reserve could become are keeping pressure on the US Dollar’s (USD) appeal.
Euro (EUR) Exchange Rates Lack Drive Ahead of German Inflation Projections
Demand for the Euro (EUR) has been poor in recent weeks, as market concerns over the increasingly deep contraction in German and Eurozone manufacturing drive the currency to near its worst levels against major rivals like the US Dollar (USD).
The concerning Eurozone manufacturing outlook has caused speculation that the European Central Bank (ECB) could take a more dovish tone on Eurozone monetary policy before the end of the year.
Still, the Euro’s movement has been more mixed since yesterday, and investors are hesitant to sell it too much lower despite a lack of fresh support.
Anticipation for upcoming major Eurozone data due in the coming days, including German inflation projections this afternoon, are keeping Euro movement to a minimum.
This morning’s Eurozone data has continued to put pressure on the Eurozone outlook. France’s Q2 growth rate projections unexpectedly slowed to 0.2%, and German consumer confidence fell to 9.7 as forecast.
US Dollar (USD) Exchange Rates Kept Under Pressure with Federal Reserve in Focus
Investors are hesitant to move too much on the US Dollar (USD) in recent sessions, as the Federal Reserve’s July policy decision is now just a day away.
The bank’s 2-day monetary policy meeting begins today, and the decision will be announced tomorrow evening.
Analysts widely expect that the Fed will cut US interest rates by 25 basis points in the meeting, but some investors continue to speculate the possibility of a more aggressively dovish 50 basis point rate cut.
The possibility of a more dovish than expected Federal Reserve is keeping pressure on the US Dollar this week, even after last week’s US growth data beat expectations.
Overall, anticipation for upcoming US data and tomorrow’s Federal Reserve news is keeping the US Dollar from climbing too much against a weak Euro (EUR).
Euro to US Dollar (EUR/USD) Exchange Rate Traders Anticipate Major Data and Federal Reserve
The Euro to US Dollar (EUR/USD) exchange rate’s movement has been mixed so far this week, but there hasn’t yet been much in the way of notable data.
That’ll change in the coming days, with slews of major Eurozone data, the Federal Reserve, and a few major US ecostats due today and tomorrow alone.
Euro (EUR) investors are anticipating German inflation stats due this afternoon, which could further influence the market’s German economic outlook following persistent weakness in German stats lately.
If they disappoint investors, EUR/USD would be even more likely to fall back to its worst levels all year as European Central Bank (ECB) easing speculation would rise.
German retail sales and unemployment, French inflation, and Eurozone inflation, unemployment and growth, will all be published tomorrow and could have a similar impact on the Euro.
However, tomorrow’s biggest event will be the Federal Reserve policy decision.
Markets are still uncertain of just how dovish the Fed will become. If the Fed is more dovish than analysts expect, the US Dollar’s (USD) recent recovery could be rowed back and EUR/USD could advance.
US PCE inflation data this afternoon and employment data from ADP tomorrow could also influence the Euro to US Dollar (EUR/USD) exchange rate.