Currency News

Daily Exchange Rate Forecasts & Currency News

Euro US Dollar (EUR/USD) Exchange Rate Trades Sideways as China Capitulates on Trade

April 10, 2018 - Written by John Cameron

ECB Nowotny Promotes Summer end to Bond Purchasing Scheme – EUR Exchange Rates Supported



The Euro US Dollar (EUR/USD) exchange rate traded sideways on Tuesday, bolstered by hawkish comments from European Central Bank (ECB) Policymaker Ewald Nowotny but limited by news that China is willing to capitulate on trade.

Mr Nowotny asserted that the ECB must not fall ‘behind the curve’, and that he could see the central bank ending its extensive bond purchasing scheme at the end of September when the bond purchasing scheme elapses.

‘This purchase programme runs until the end of September 2018. We will have to decide in summer what happens next’, he stated at a news conference, continuing:

‘I think that if we have a situation like the one we now expect… that we will have the possibility to reduce this programme significantly and head towards an end of the programme’.

This sentiment gave the single currency a notable push, with today’s rather sparse EU data calendar leaving the market focus on this notable soundbite.

China Agrees to Lower Tariffs – US Dollar (USD) Exchange Rates Rise



The US Dollar (USD) saw an upsurge in support on Tuesday, bolstered by news that Chinese President Xi Jinping has capitulated on elements of trade.

Advertisement
Amongst many things, the Chinese leader asserted that the ‘cold war mentality’ is out of place and that China must now open itself to trade.

This included a reduced tariff on auto-related products, lower curbs on high-tech trade and stronger intellectual property laws – all major issues in US negotiations.

‘Human society is facing a major choice to open or close, to go forward or backward,’ he told investors, gathered at the resort island of Hainan.

This is a massive step forward for US/China trade negotiations, with markets extremely pleased by the news and the possibility that a global trade war could be averted.

EUR/USD Exchange Rate Forecast: US Inflation in the Spotlight



Tomorrow is a big day for US data, with the highly anticipated US consumer price inflation figures and the March Federal Open Market Committee (FOMC) meeting minutes both due.

Each of these events could have big implications on the US Federal Reserve’s monetary policy measures in the months ahead, with an accelerated rise in consumer prices liable to push the bank towards 4 rate hikes this year, rather than 3, and the minutes capable of revealing similar sentiment.

In this regard, a marked rise in inflation could put the EUR/USD exchange rate under greater pressure, particularly now that trade worries with China seem to have ebbed (even if only temporarily).
Like this piece? Please share with your friends and colleagues:

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: Euro Forecasts

Comments are currrently disabled