Euro to US Dollar Exchange Rate Weakens Ahead Of US Sentiment Data, Volatility Forecast for Currency Pair Today

June 11, 2015 - Written by Ben Hughes

STORY LINK Euro to US Dollar Exchange Rate Weakens Ahead Of US Sentiment Data, Volatility Forecast for Currency Pair Today

Exchange Rate News: Euro to US Dollar Weakens Ahead Of US Data

The Euro to US Dollar exchange rate weakened by nearly 0.50% on Thursday as worries over the Greek debt crisis damaged sentiment towards the single currency and as investors turned their attention to the release of upcoming US retail sales and jobless claims data. If those figures come in strongly then the ‘Greenback’ will make more gains and perhaps send the Euro as low as 1.11.

The EUR/USD exchange rate spent the European session fluctuating between 1.1181 and 1.1331

With time rapidly running out for Greece, investors are growing increasingly concerned that unless a deal is reached between it and its international creditors the nation will default on its debt repayments and potentially be forced to leave the Eurozone. Late night talks were held between the leaders of France, Germany and Greece in Brussels on Wednesday night but again they ended in disappointment.

‘I really like Greek tragedy but now we must move to the happy ending. In the coming days we must really intensify talks and they must be productive. Divergences remain, in particular on Greece’s primary surplus, but we are close to the landing strip. There is political will, we can and must succeed. Greece must make more efforts to provide a list of reforms so that their economy can be more solid and so that they can fulfil their commitments to their creditors. I am convinced that divergences have now been narrowed enough, so that in the days to come we can intensify our work and reach the outcome we all want,’ said EU Economic Affairs Commissioner Pierre Moscovici.

French CPI Data Helps Limit Euro Exchange Rate Losses

Further losses for the Euro were held in check somewhat as data out of the Eurozone’s second largest economy; France, showed that consumer price inflation increased for a second consecutive month in May.

According to Insee, France’s consumer price index rose 0.3% on a year-on-year basis, a faster pace than the preceding month’s increase of 0.1%. The figure matched economist expectations. On a month-on-month basis, consumer prices were shown to have risen by 0.2%. The main cause of the rise was a 6.4% increase in fresh food prices.

Exchange Rate Movement Expected after US Retail Sales Report, EUR/USD Could Fall Further

The EU measure of inflation, the harmonized index of consumer prices rose 0.3% on annual basis in May as expected after climbing 0.1% in April. Month-on-month, prices increased 0.1%, in line with forecasts. Core inflation accelerated to 0.6% in May from 0.4% in the prior month. Core consumer prices rose 0.2% from the preceding month.

US retail sales are forecast to have rebounded strongly in May and the number of Americans claiming unemployment benefits is expected to have fallen.

US Confidence Data to Impact EUR/USD Exchange Rate Trading on Friday

Before the weekend the Euro to US Dollar (EUR/USD) exchange rate could by subject to further volatility as a result of the US University of Michigan Confidence Index. As the US is a consumer-driven economy, signs of improvement in sentiment would bode well for the nation's economic outlook and potentially push the 'Greenback' higher still against the Euro. As it stands, the EUR/USD exchange rate is trending in the region of 1.1211 - down 0.3% on the day's opening levels. The Euro also registered declines against peers like the Pound (GBP) and Swiss Franc (CHF).

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