Euro US Dollar Exchange Rate Outlook for US Dominance Next Week

May 13, 2016 - Written by Toni Johnson

STORY LINK Euro US Dollar Exchange Rate Outlook for US Dominance Next Week

Owing to the current disparity between planned US and Eurozone economic announcements, it is possible that the single currency will be on the defensive in the week to come.

Eurozone Gross Domestic Product to Provoke Euro Volatility Today

Analysts estimate that the euro to US Dollar exchange rate comprises almost three quarters of the $5.3 trillion exchanged in the world’s FX market on a daily basis and today’s session promises to be a market-moving one for the world’s premier currency pair.

EUR USD has looked like dropping down to parity for much of the past two years; the pair fell into the 1.0500s as recently as last November and dipped briefly into the 1.0400s just over a year ago. However, the EUR USD has spiked to a fresh near-term high of 1.1592 this month and FX insiders forecast that there could be further upside to follow.

In order to maintain its forward momentum, the euro (currency : EUR) will need a strong showing from this morning’s provisional whole of eurozone Gross Domestic Product data. A year-on-year result of 1.6% is anticipated from the keynote growth figure – a repeat of the Q4 2015 outcome. If the statistic prints at above this levels, then investors are likely to become increasingly convinced that the European Central Bank’s €80bn per month Quantitative Easing programme is having its desired effect in kick-starting economic activity in mainland Europe.

The EUR USD exchange rate is likely to make a renewed run at the range-topping rates it touch only ten days ago as a result.

Euro to US Dollar (EUR/USD) Exchange Rate Outlook Neutral to Positive

Elsewhere, the EUR USD exchange rate would also benefit from a below-par showing from this afternoon’s Michigan Confidence survey in the USA. T

he headline-grabbing figure is penned in for publication at 1500hrs BST and a slight improvement from April’s outcome of 89.0 is anticipated. Economic participants Stateside continue to fret that the US Federal Reserve will increase its headline interest rate at next month’s meeting. At the time of writing, futures markets price-in only a 7.5% likelihood of such an event, but the mere prospect of another hike, no matter how remote, plays on the mind of individuals and companies Stateside.

The EUR USD exchange rate forecast is therefore neutral to positive.

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TAGS: American Dollar Forecasts Currency Predictions Euro Forecasts