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Euro US Dollar (EUR/USD) Exchange Rate Slips on Eurozone Slowdown

February 7, 2019 - Written by John Cameron

Euro US Dollar (EUR/USD) Exchange Rate Falls as German Industrial Figures Disappoint

The Euro US Dollar (EUR/USD) exchange rate is down today and is currently trading around $1.1346 on the inter-bank market.

The Euro (EUR) fell against the US Dollar (USD) after the publication of German industrial production figures for December, which slipped -0.4%.

These were followed by the publication of the French trade balance figures for December which also fell to a disappointing €-4.65bn.

EUR traders are becoming increasingly concerned as the Eurozone economy is showing signs of slowing.

This is following yesterday’s plummeting German factory orders and Italy’s recent slide into a recession.

UK Brexit concerns are still putting pressure on EUR as Prime Minister Theresa May met with EC President Jean-Claude Juncker today.

In a joint statement it was reported that Juncker ‘underlined that the EU27 [would not] reopen the withdrawal agreement’, however, it continued:

‘[Juncker] expressed his openness to add wording to the political declaration [to be] more ambitious in terms of content and speed when it comes to the future relationship.’

The US Dollar, meanwhile, benefited today after the publication of the US initial jobless claims figures for February, which decreased to 234K.

These were followed by the printing of the US continuing jobless claims figures for January, which also decreased.

USD/EUR Exchange Rate Rises on Safe-Haven Benefit as Eurozone Struggles

USD has also benefited from its safe-haven status following the poor performance of the Eurozone economy this week, with many EUR traders fleeing to its rival.

Many ‘Greenback’ traders, however, are remaining cautious as the divide between the White House and the House of Representatives is showing sides of widening.

President Donald Trump’s demand for funding for the controversial Mexican border wall also shows no signs of abating, with the President recently tweeting:

‘Tremendous numbers of people are coming up through Mexico in the hopes of flooding our Southern Border. We have sent additional military. We will build a Human Wall if necessary. If we had a real Wall, this would be a non-event!’

EUR/USD Forecast: Eurozone Recession Fears Could see Euro Plummet

EUR investors will be looking ahead to tomorrow’s printing of the German trade balance figures, which are expected to further decrease.

Tomorrow will also see the release of the French industrial output figures for December, which are expected to increase.

Many EUR traders, however, will be looking further ahead to Monday next week, which will see the publication of the German ZEW survey of economic sentiment for February.

USD investors, meanwhile, will also be looking ahead to Monday’s US unit labour cost figures for the fourth-quarter, which are expected to increase – potentially providing some further uplift for the ‘Greenback’.

The EUR/USD exchange rate will remain sensitive to any further political or economic developments next week.

With signs that the Eurozone is slowing down, any further hints of a possible recession could see the single currency come under further pressure.

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