EUR/USD Exchange Rate Rangebound, Trump Lashes Out at China’s Trade Practices
The Euro US Dollar (EUR/USD) exchange rate held steady at around $1.099 after US-China trade tensions renewed following US President Donald Trump’s criticism of China’s trading practice in his UN speech yesterday.
Mr Trump said:
‘Not only has China declined to adopt promised reforms, it has embraced an economic model dependent on massive market barriers, heavy state subsidies, currency manipulation, product dumping, forced technology transfers and the theft of intellectual property and also trade secrets on a grand scale.’
As a result, the US Dollar stabilised against the Euro as tensions between the two superpowers are expected to weigh on the US economy in the near term.
Meanwhile, the ‘Greenback’ has found some appreciation in Asian markets after China reported its plan to boost purchases of US farm products in a gesture of goodwill ahead of next month’s trade talks.
The US Dollar could, however, rise later on this afternoon if August’s new home sales figure confirms consensus and rises from 0.635 million to 0.660 million.
EUR/USD Exchange Rate Holds Steady on German Recession Fears
The Euro (EUR) failed to gain on the US Dollar today after yesterday’s German IFO business climate index modestly improved from 94.3 to 94.6. The slight improvement was, however, overshadowed by the unexpected decline in the expectations index.
As the Eurozone’s power house economy, continuing fears that Germany could face a recession in the third-quarter have held back the European currency’s gains today.
Meanwhile, today saw French consumer confidence hit its highest level since January 2018, with the figure rising from 103 to 104 on the month. However, this fail to buoy market confidence in the struggling Eurozone economy.
The UK’s political developments will remain in focus today, with the British Parliament due to reopen after the UK Supreme Court ruled Prime Minister Boris Johnson’s suspensions unlawful.
The Euro could begin to edge higher against the ‘Greenback’ if the Conservative Government is challenged on its hard-Brexit stance, as this would further reduce the odds of a disorderly exit on the 31 October deadline.
EUR/USD Outlook: German Consumer Confidence in Focus
US Dollar traders will be bracing for tomorrow’s Q2 growth figure, which is expected to hold at 2%. These will be followed by US pending home sales for August.
Tomorrow will also see the release of the European Central Bank’s economic bulletin report.
Euro investors will, however, be looking ahead to tomorrow’s release of October’s GfK consumer confidence survey figure.
Any signs of improvement could ease fears of an imminent recession for the Eurozone’s largest economy and could boost the EUR/USD exchange rate.