Euro to US Dollar Forecast: EUR/USD Exchange Rate Higher on Disappointing US data

Modified: Thursday, 5 February 2015 15:46 BST - Written by Ben Hughes

STORY LINK Euro to US Dollar Forecast: EUR/USD Exchange Rate Higher on Disappointing US data

The Euro to US Dollar exchange rate made gains following the release of mixed data out of the world’s largest economy and positive data out of the 19-member Eurozone.

Factory orders in the Eurozone’s largest economy of Germany were shown to have rallied strongly in the final month of last year, suggesting that the currency bloc could be on the verge of seeing the beginnings of a recovery.

According to the Berlin based Economy Ministry, Adjusted for inflation and seasonal swings, factory orders increased by 4.2%, a strong rise from the preceding months decline of -2.4%. The gain was the largest recorded since July last year and beat economist forecasts for a rise of 1.5%. On a year on year basis orders rose by 3.4%.

‘Orders developed positively at the end of the year. The indicators speak clearly for the weak phase of last year having been overcome,’ said the ministry in a statement released alongside the data.

Orders from the Euro area led gains in German factory orders in December, rising 5.9%, while domestic demand climbed 3.4%. Orders for basic goods increased 2.8% and investment goods advanced 5.7%. Consumer goods fell 0.6%.

Also aiding the Euro was the announcement by the European Commission that it had upgraded its growth forecasts for 2015 and 2016. The EC now expects economic growth across the Eurozone to rise by 1.3% in 2015 and by 1.9% next year. Previously the EC had forecast for 2015 growth of 1.1% and 2016 growth of 1.7%.

‘Europe’s economic outlook is a little brighter today than when we presented out last forecast, but there is still much hard work ahead to deliver the jobs that remain elusive for millions of Europeans,’ said EC economic chief Pierre Moscovici.

The optimistic outlook could be shaken however due to the ongoing negotiations between the New Greek government and its creditors.


The US Dollar meanwhile was weakened by the release of a report, which showed that the USA’s trade deficit widened to its highest level since 2012 as imports increased and exports slowed. According to the Washington based Commerce Department the trade deficit widened by 17.1% to $46.6 billion. The percentage increase was the largest seen since 2009.

Further losses for the ‘Greenback’ were restrained as a separate report showed that fewer Americans than forecast filed for unemployment benefits last week. Applications rose to 278,000, below expectations for a rise of 290,000.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: American Dollar Forecasts Currency Predictions Daily Curre Forecasts