Euro to US Dollar: EUR/USD Exchange Rate at 9-Week High after Positive Eurozone Data

April 30, 2015 - Written by Ben Hughes

STORY LINK Euro to US Dollar: EUR/USD Exchange Rate at 9-Week High after Positive Eurozone Data

Euro to US Dollar at 9-Week High after Positive Eurozone Data

The Euro advanced to its best level in 9-weeks against the US Dollar in Thursday’s session as the single currency received support from better-than-expected GDP data from Spain and a report, which showed that the Eurozone exited deflation in April. Eurozone unemployment data also showed tentative signs of improvement.

‘Highly welcome news for the ECB as the Eurozone exited deflation in April as consumer prices were flat year-on-year. Adding to the good news Eurozone unemployment dropped 36,000 in March, which was a fourth successive decline. However, it was the smallest decline since November, largely due to Italian unemployment rising by a disappointing 52,000. Nevertheless, the number of Eurozone unemployed has fallen by 418,000 since November 2014. Meanwhile, it looks like Eurozone GDP growth may well have picked up to 0.5% quarter-on-quarter in the first quarter of 2015 from 0.3% in the fourth quarter of 2014,’ said Howard Archer, chief European economist at IHS Global Insight.

According to Eurostat, inflation across the single currency bloc ticked up from -0.1% to zero. The improvement will be of welcome news to the European Central Bank, as the improvement in inflation will be seen as justification for the implementation of its €1 trillion quantitative easing programme. Despite that, inflation remains well below the banks inflation target of 2%. Unemployment across the region was shown to have fallen by 36,000 in March to 18.105 million. The overall unemployment still stood at 11.3% however.

Also supporting the Euro was data out of Spain, which showed that the nation is beginning to recover strongly. The country is becoming the Eurozone’s top performer as its economy is now growing at its best pace since 2007. GDP expanded by 0.9% to beat economist forecasts for a rise of 0.8%. Compared to the USA, the Spanish economy is growing at a rate, which is 18 times faster.

The US Dollar remained under pressure against the Euro and other major peers such as the Pound Sterling after data released in the previous session showed that the US economic growth slowed dramatically in the first quarter of the year. The US economy grew by just 0.2% in the three months to March, slowing from the 2.2% seen in the final quarter of 2014. The figure was the weakest rate of growth in a year. The currency was also weighed upon by the Federal Reserve leaving interest rates unchanged and delivering a rather dovish policy statement.

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