Euro Rate Today - EUR USD Exchange Rate Gains After Positive German PMI; Euro zone PMI Flops

August 21, 2014 - Written by David Woodsmith

STORY LINK Euro Rate Today - EUR USD Exchange Rate Gains After Positive German PMI; Euro zone PMI Flops

Currency News UK - Euro rate today: The EUR USD exchange rate advanced yesterday after above forecast German PMI

The Euro (EUR) is presently trading higher against the US Dollar (USD) today in the EUR to USD exchange rate, following a mixed bag of Purchasing Managers Index figures from the Eurozone, which has shown that the largest economy - Germany has seen growth more substantial than anticipated in August.

Meanwhile the US Dollar is trading tentatively in the currency market, after hawkish US meeting minutes encouraged investors confidence, and await the prospect of the Federal Reserve continuing their hawkish stance on Friday in the Jackson Hole meeting for banking leaders.

- The Euro to Australian Dollar exchange rate is steady at 1.42775 EUR/AUD.
- The Euro to Canadian Dollar exchange rate is 0.08% pct lower at 1.45336 EUR/CAD.
- The Euro to Pound Sterling exchange rate is trading up 0.17 pct at 0.80008 EUR/GBP.
- The Euro to New Zealand Dollar exchange rate is 0.07% per cent lower at 1.58241 EUR/NZD.
- The Euro to Dollar exchange rate is trading 0.09 pct higher at 1.32708 EUR/USD.

Speculation for the Fate of the US Dollar Mounts Ahead of Symposium

The latest Federal Reserve meeting in July has brought with it the revelation that interest rate hikes in the US may happen sooner rather than later if the employment figures keep proving positive in the US economy. The minutes which were released late on Wednesday stated: ‘Many participants noted that if convergence toward the committee’s objectives occurred more quickly than expected, it might become appropriate to begin removing monetary policy accommodation sooner than they currently anticipated.’ However, with US Initial Jobless Claims and Continuing Claims figures released this afternoon, the US Dollar may see some further encouragement to rally if the figures prove favourable. At present the Initial Jobless Claims figures are expected to reach 303K, less in comparison to the previous week’s 311K. Furthermore, Continuing Claims statistics are expected to fall from the previous 2544K to 2520K.

The US Dollar has remained popular in recent weeks after strings of upbeat US data surfaced, and the Federal Reserve adopted a slightly more hawkish tone in their statements. Forex expert Adrian Miller commented: ‘The tone of the minutes were clearly more hawkish than expected. It seems the committee may be closer to a rate hike decision than Chair Yellen’s recent comments would suggest.’ Chairwoman for the Federal Reserve Janet Yellen will be speaking on Friday at the Jackson Hole, Wyoming Symposium, joined by other central bank leaders such as Mario Draghi for the European Central Bank. The Dollar is trading keenly ahead of Friday’s talks in the hope that Yellen will discuss influential rate hike topics, which would encourage the US Dollar to rally.

Eurozone Underperformance Causes Fears in Shaky Recovery

The Eurozone has published more disappointing data today, further emphasising its underperformance for economic expansion. Despite the German economy withstanding global tensions at present, the Eurozone has seen its third largest economy—Italy, enter a recession and the second largest economy—France, stagnate in its expansion. Economist at Berenberg Bank Christian Schulz commented: ‘The geopolitical uncertainties, and in particular the crisis in Eastern Ukraine, threaten to undermine the export-led recovery at least temporarily. The aftermath of the crisis in particular high unemployment rates and continued public and private-sector deleveraging, limit the potential growth contributions from public and private consumption.’

The Eurozone Manufacturing PMI fell to 50.8 in August, falling short of the 51.3 economists had expected; meanwhile the Eurozone Services figures only attained 52.8, down again from the 53.7 expectation. Furthermore, the Eurozone Composite PMI data only managed to reach 52.8, which is another disappointment when economists had forecast 53.4.

The Euro to Dollar (EUR/USD) exchange rate is likely to fluctuate after the result of Janet Yellen’s statements on Friday, which is likely to affect a large part of the currency market.

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