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Euro US Dollar (EUR/USD) Exchange Rate Rallies as Eurozone Data Impresses

November 29, 2018 - Written by John Cameron

EUR/USD Exchange Rate Rallies as Slew of Positive Data is Released from Eurozone

The Euro US Dollar (EUR/USD) exchange rate has rallied after a range of positive and better-than-predicted data was released from the Eurozone.

Eurozone business climate figures for November grew higher than expected from 1.01 to 1.09 despite a predicted contraction.

Despite personal spending in the US over October showing a higher-than-expected growth from 0.2% to 0.6%, the USD has not been able to claw back the losses it has suffered over the course of today.

US unemployment claims figures weighed the US currency down, as worse-than-expected figures were released showing that unemployment claims have gone up, with initial jobless claims rising from a previous 224k to 234k, despite a forecast that suggested this number would drop.

Continuing jobless claims also rose higher than expected, from 1.660m to 1.710m, despite a forecast increase to 1.664m.

EUR/USD Exchange Rate Bolstered by Better-than-Expected German Unemployment Figures

Some weaker data from the Eurozone saw the Euro slump against the Dollar as consumer confidence figures from Germany reported a greater-than-expected drop from 10.6 to 10.4.

Nevertheless, the Euro was bolstered this morning by German unemployment figures, which came in at record lows.

The number of people without work fell by 16,000, despite a forecast suggesting the figure would only drop by 10,000.

French Q3 GDP remained steady quarter-on-quarter, but compared to this time last year there was a worse-than-expected drop from 1.5% to 1.4%.

US Dollar Weakens as Tone of Federal Reserve Turns Dovish

The US core personal consumption expenditure prices were released yesterday which, despite a forecast that the figure would remain steady at 1.6%, dropped to 1.5%, which did little to prompt the Dollar (USD) to rally against the Euro (EUR).

A speech made by the chair of the US Federal Reserve, Jerome Powell, aided the EUR/USD exchange rate with his perceived dovish tone.

At the same time, US GDP growth stumbled in the third quarter, printing at an annualised rate of 3.5%, which nevertheless represents a robust rate of growth.

Yesterday’s new homes sales figures in the US however did little to help bolster the Dollar, as despite a forecast of 0.575m, the actual figure was a smaller-than-expected 0.544m.

EUR/USD Exchange Rates to Slump in the Wake of US Data Releases and Cooled Trade Tensions?

With the Federal Open Market Committee minutes being released this evening, if the tone of the meeting is hawkish it seems likely that USD will regain some of its previous losses against EUR.

Tomorrow will see the release of the US Chicago purchasing manager’s index - if the figures are set to decrease as forecast, USD may struggle against the Euro.

The consumer price index for the Eurozone is also set to be released on Friday, and if the figures are to perform as expected and decrease from 2.2% to 2% in November compared to last year it is likely that the Euro will see some downside pressure.

At the G20 summit this weekend, any signs that the trade tensions between the US and China are being resolved will likely be Dollar negative as investors remove funds from safe havens.

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