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Euro EUR Exchange Rate Forecast Buoyed by VW Sales Data

October 9, 2015 - Written by John Cameron

Foreign Exchange Newsflash: New Car Sales Data Boosts Euro (EUR) Trading



FX insiders don’t ordinarily pay much attention to the new car sales breakdown data, published on a monthly basis by Society of Motor Manufacturers and Traders (SMMT), which shows the number of each make purchased by UK buyers on a monthly basis.

Volkswagen Sales to Impact Germany and EUR Exchange Rate Forecasts



However, this month’s version was pored over by investors holding euro (currency : EUR)–denominated assets following the Volkswagen emissions scandal which broke on 21st September. Even as VW’s US President and Chief Executive Michael Horn faced questioning from US lawmakers on Capitol Hill, the latest SMMT figures were published on the other side of the Atlantic and they provided some grounds for optimism.

Data Supports Euro Exchange Rate to US Dollar, Pound Sterling Trading



A fuller picture will emerge next month, but the early indications are positive for investors holding the euro. The SMMT data revealed that 39,263 new VW models were sold last month compared to 37,852 in September 2014. The healthy uptick suggests that Volkswagen (XETRA: VOW3) has not been significantly damaged by the scandal and this impression was re-enforced by the relatively steady performance from VW’s shares on the day; the Frankfurt listed company’s stock slightly dropped on the day, closing down by just 0.48%. This result appears to be good news for the euro moving forward.

Conversion Rate Predictions Now: US Jobs Data Impacts US Dollar (USD)



Elsewhere, yesterday afternoon’s weekly US jobs data once again painted a mixed picture of the US labour market. The Dollar-negative effect of a marginally higher than anticipated set of Continuing Claims data was largely off-set by a better than expected Initial Jobless Claims figure. Dollar-watchers will have to wait until Wednesday for the next tier one data release from the US; the September US Advance Retail Sales numbers will inform opinion regarding the likely timing of the next US Federal Reserve interest rate increase. In the meantime, the Pound Sterling US Dollar exchange rate appears happily established around the 1.5300 GBP USD level.
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