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EUR USD Exchange Rate Flops on Rising Signs of March Fed Rate Hike

February 15, 2017 - Written by James Fuller

The Euro to US Dollar exchange rate continued to climb on Thursday afternoon. At the time of updating, the pair had hit a new weekly high of 1.0674.

Investors bought the Euro from its cheapest levels throughout the day despite a lack of fresh supportive Eurozone data. Expectations that Greek debt relief talks would see quick and smooth developments also bolstered demand for the shared currency on Thursday.

[Previously updated 16/02/2017]

While the fourth quarter French unemployment rate failed to fall as far as forecast this was not enough to prevent the Euro to US Dollar exchange rate from rallying.

Despite the rising odds of the Federal Reserve opting to hike interest rates sooner rather than later the appeal of the US Dollar weakened on Thursday as investors were inclined to favour higher-yielding assets.

[Previously updated 15/02/2017]

EUR USD Drops Today as Greek Debt Talks Approach Key Juncture

The Euro has fallen by -0.4% against the US Dollar following Tuesday afternoon’s Fed testimony, during which Chair Janet Yellen hinted that a US interest rate hike could be incoming.

Eurozone news has shown the December trade balance rising to 28.1bn against forecasts of a fall, though this has failed to support the Euro.

The greater investor focus has been on Greece, where the deadline for a solid agreement between the Government and creditors is rapidly approaching.

Given that a number of high profile elections are taking place across the Eurozone in the future, the pressure is mounting to resolve the issue before it gets pushed aside in order of importance by events like the Dutch and French elections.

EUR Shifts Possible on Incoming Unemployment and Construction Figures

The last Eurozone ecostats of the week will be spread over Thursday and Friday, although outside of this any developments from Greece are also set to trigger movement.

Following this will be Friday morning’s Eurozone-wide construction output stats for December, which previously posted a flat 0% figure on the year.

USD Rally Seen as Fed’s Yellen’s Comments Override Negative Flynn Sentiment

The US Dollar has gained in strength against the Euro today due to remarks on Tuesday from Janet Yellen, who indicated that under the right conditions, a near-term US rate hike could be ‘appropriate’.

Political news has been less supportive, with a scandal engulfing the US Department of National Security after Donald Trump’s appointee, Michael Flynn, was forced to resign. The charges were that Flynn was compromised to Russian interests, having previously spoken with Russian officials before he was officially appointed.

US data out today has shown inflation in January rising on the month and the year, while retail sales growth in the same month has jumped from 4.4% to 5.6% on the year but slowed for the monthly reading.

USD Forecast: Further Fed Input Due along with US Housing Data on Thursday

The Federal Reserve is set to continue influencing US Dollar movement in the near-term, with further testimony from Janet Yellen and remarks from officials Eric Rosengren and Patrick Harker expected today.
Thursday’s notable US data will include building permits and housing start figures for January, along with jobless claims stats for the start of February.

In what may be a blow for the fledgling Trump administration, initial and continuing claims are both set to rise.

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