The Euro US dollar exchange rate advanced 0.4% versus the dollar across the previous week. The euro was pushing higher versus a weaker US dollar as trading begins on Monday.
The euro was on the rise his morning after a welcomed surprise from German exports. October trade data is keeping hopes alive that the economy could avoid a contraction in the final quarter. Despite the ongoing trade dispute and slowing global demand, data is showing that German exports have held up well. The stronger than forecast trade figures come following a disappointing run of macro-economic data last week as German industrial production declined further, German factory orders fell from -5% to -5.5% in October and retail sales also missed the mark.
The main risk event of the week for euro investors will be Thursday’s European Central Bank monetary policy meeting. This will be the first one with Christine Lagarde at the helm. Analysts are not expecting any change to monetary policy. Instead focus will be on a strategic review.
Dollar Eases On Trade Tensions After Strong NFP
The US dollar had a late surge last week, rallying across the board on Friday, following the Labour Department’s jobs report. The US no farm payroll smashed expectation with 266,000 new jobs being created in November. This headline figure was significantly above the 180,000 that analysts forecast. It was also the strongest job creation number since January. Unemployment fell to 3.5%, returning to the 2019 low and the lowest level since 1969.
Hourly wages were also impressive, surprising to the upside by growing 3.1% year on year, ahead of the 3% forecast. Overall the jobs report was solid and served to calm concerns over the health of the US economy ahead of the Federal Reserve monetary policy announcement later this week.
The Federal Open Market Committee is not expected to adjust monetary policy when they meet this week. After three insurance interest rate cuts across the year, the Fed has said that the cycle is over. According to the CME Fedwatch tool, and following the strong US jobs data, dollar investors are pricing in just a 0.7% probability of rates being adjusted by the Fed this week.
Trade remains in focus at the start of the week. President Trump calling on the World Bank to stop lending to China could aggravate tensions between the two powers ahead of the 15th December trade tariff deadline.
| What do these figures mean? |
| When measuring the value of a pair of currencies, one set equals 1 unit and the other shows the current equivalent. As the market moves, the amount will vary from minute to minute.
For example, it could be written: 1 EUR = 1.12829 USD Here, €1 is equivalent to approximately $1.13. This specifically measures the euro’s worth against the dollar. If the U.S. dollar amount increases in this pairing, it’s positive for the euro. Or, if you were looking at it the other way around: 1 USD = 0.88789 EUR In this example, $1 is equivalent to approximately €0.89. This measures the U.S. dollar’s worth versus the euro. If the euro number gets larger, it’s good news for the dollar. |
