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EUR USD Exchange Rate Rises after Trump Changes Tact on Israeli-Palestinian Conflict

February 16, 2017 - Written by John Cameron

The Euro to US Dollar exchange rate slipped back from its weekly highs on Friday afternoon and looked to end the week nearer its opening levels at around 1.06.

Demand for the US Dollar improved on Friday afternoon as the day’s US leading index report improved from 0.5% to 0.6% month-on-month, despite being predicted to remain at 0.5%.

[Previously updated 11:00 GMT]

Even though December’s Eurozone current account surplus widened markedly from 40.8 billion to 47.0 billion this failed to shore up the Euro US Dollar exchange rate ahead of the weekend.

Despite a continued lack of detail over the Trump administration’s promised tax reforms the US Dollar remained on a stronger footing, benefitting as risk appetite generally weakened.

[Previously updated 16/02/2017]

Euro Update: Eurozone Unemployment Drops, Greek Debt Outcome Remains Uncertain

The Euro’s advance against the US Dollar today comes after a pair of supportive drops in unemployment, coming from France and the Netherlands.

Additional support has been granted by the Italian trade balance figure, which has shown a December surplus expansion from 4.2bn to 5.8bn.

Greek debt crisis negotiations continue in the background; most recently, European Commissioner Pierre Moscovici has stated that ‘small steps remain’ before an agreement on bailout funding can be reached.

EUR Gains Predicted if Incoming Construction Stats Show Annual Growth

The Euro’s last domestic news will be Friday morning’s construction output figure for December.

Previously, the level of construction stagnated at 0% so even a fractional rise has the potential to boost Euro demand against the US Dollar.

Looking forward to next week, Monday will bring the provisional Greek debt talks deadline, by which time an agreement needs to be reached between the Greek Government and its creditors.

While talks can continue after this stage, their chances of bearing fruit will be greatly reduced due to officials and negotiators being preoccupied with upcoming Eurozone elections.

US Dollar Losses Triggered as Trump Moves Away from Two-State Israel Policy

Donald Trump has caused the latest drop in US Dollar demand, both directly and indirectly. In the former case, during a recent meeting with Israeli Prime Minister Benjamin Netanyahu, Trump mused abandoning the ‘two-state’ solution that has been official US policy for two decades.

This raises the danger of a more one sided stance being taken on concluding the Israeli-Palestinian conflict, which has raged for over 60 years.

Less directly, US investors have been panicked by the withdrawal of Trump’s Labour Secretary Andrew Puzder from the confirmation process.

This represents yet another setback to Trump’s cabinet creation, leaving further uncertainty among investors as a new candidate must now be chosen.

USD Forecast: National Housing Stats in Focus Today and Next Week

Outside of any unexpected Trump remarks or policy revelations, US housing data will be the next major sources of USD influence.

This afternoon will see housing starts and building permits for January; both fields are expected to rise, although only by a fractional amount.

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