Euro to Dollar: EUR/USD Exchange Rate Firmer on Softer US Data

November 13, 2014 - Written by Frank Davies

STORY LINK Euro to Dollar: EUR/USD Exchange Rate Firmer on Softer US Data

The Euro strengthened against the US Dollar as it found support from positive French inflation data and softer than forecast US Jobless Claims data.

Earlier in the session, the Euro advanced after data out of France and other Eurozone members showed improvement in their inflation rates.

According to French Statistical Office INSEE, France’s harmonised index of consumer prices (HICP) rose by 0.5% on an annual basis following a 0.4% rise in September.

The figure was better than economist forecasts for the inflation rate to remain steady at 0.4%. On a monthly basis, the HICP remained unchanged at 0%, defying economist expectations for a decline to -0.1%.

Inflation data out of Germany and Spain came in unchanged from the previous month and a separate report out of Greece showed that unemployment in the embattled nation improved slightly. The jobless rate slipped from a revised figure of 26.1% to 25.9% in August.

The Euro to Australian Dollar conversion rate is +0.09 pct higher at 1.42836 EUR/AUD.
The Euro to Canadian Dollar conversion rate is +0.63 pct higher at 1.41621 EUR/CAD.
The Euro to Pound Sterling exchange rate today is converting +0.62 per cent higher at 0.79309 EUR/GBP.
The Euro to New Zealand Dollar exchange rate today is converting -0.15 per cent lower at 1.57837 EUR/NZD.
The Euro to US Dollar exchange rate converts +0.44 per cent higher at 1 EUR is 1.24842 USD.

Euro Rate Today

The earlier data was enough to keep the Euro supported and shrug off news that a group of 61 economists told the European Central Bank that they had slashed their growth and inflation forecasts.

They cut their growth forecast from 1.5% to 1.2% as the conflict in Ukraine and falling oil prices negatively affect upon the Eurozone economy. Inflation expectations for 2015 meanwhile were cut from 1.2% to 1% and the rate in 2016 from 1.5% to 1.4%.

‘The ECB's current approach is not working and doing more of the same will yield similarly disappointing results... The Eurozone needs more substantial, effective monetary policy stimulus – and soon. The outlook for both growth and inflation has worsened and the ECB staff macroeconomic projections will be revised down, yet again, in December,’ said the report.

Euro Sustains Gains vs US Dollar Exchange Rate

As the session progressed, the Euro was able to maintain its gains against the US Dollar after the US currency was softened by comments by New York Federal Reserve President William Dudley. In a speech given in Abu Dhabi mr Dudley said that the Fed would leave interest rates on hold for some time as an early rate increase could pose a threat to the US economy.

‘With inflation running low and the labour market still healing, it still is premature to begin to raise interest rates. All that said, I hope the economic outlook evolves so that it will be appropriate to begin to raise interest rates sometime next year,’ Dudley said

Also weighing on the US Dollar was a report which showed that more Americans than forecast filed for unemployment benefits last week.

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