The euro slipped in early trade versus the US dollar and has held onto those losses across the European session. The pair dropped to a low of US$1.1123 at the time of writing
The eurozone economic calendar is quiet today. Euro investors are turning the full attention to Brexit and the Parliamentary vote on Boris Johnson’s new Brexit deal later today. In addition to voting on legislation for the Brexit Agreement bill, MP’s will also vote on a procedural element, whether or not to fast track the legislation through Parliament, so as to leave the EU on 31st October.
Boris Johnson is expected to have the numbers for his Brexit deal. However, there are doubts as to whether MP’s will want to fast track it through. If they decide against the fast track route, the Prime Minister’s Brexit deal will be open to much deeper scrutiny. This means Brexit will be delayed and a level of uncertainty will continue.
A Brexit deal is beneficial to eurozone economies because it reduces uncertainty and risk. Should the Brexit deal go through, along with the fast track procedure then the UK should be leaving the EU on 31st October with a deal.
Tomorrow the economic calendar picks up with eurozone consumer confidence, ahead of Thursday’s European Central Bank meeting.
Existing Homes Sales In Focus
The US dollar has been under pressure in recent weeks amid growing concerns over the health of the US economy. Last week dire retail sales and manufacturing production figures pushed investors into believing that the Federal Reserve will cut interest rates at the next monetary policy meeting this month.
Today investors will scrutinize existing home sales data for any warning signals over the US economy. The Fed cut interest rates at the end of the summer. The lower mortgage rates should support demand. However, demand could in fact be restrained by growing economic uncertainty. A nervous consumer often means lower home sales. A weak reading could drag on demand for the dollar.
|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.