The euro rose then fell versus the US dollar on Wednesday. The pair finished trading on Wednesday roughly at the same level that it had started at. The pair remains firmly below the key level of US$1.11. The euro is edging lower in early trade on Thursday.
The euro was unable to hold onto gain from upbeat data in the previous session. A rebound in German factory orders added to signs that the eurozone economy could be over the worst of its recent troubles. German factory orders jumped an impressive 1.3% month on month in September. This is significantly ahead of the 0.1% increase than analysts had forecast. The euro rallied following the results.
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However, the common currency gave up those gains after the International Monetary Fund Regional Economic Report downgraded eurozone growth and inflation forecasts for 2019 and 2020. The IMF also suggested that monetary policy should remain accommodative given the subdued inflationary pressures.
Today’s German industrial production numbers were less encouraging, declining -0.6% month on month in September. This was down considerably from the previous months’ 0.3% increase.
The final piece of data for investors to focus on today will be the European Central Bank’s Economic Bulletin. This is a monthly report. This will be the final piece of high impacting eurozone data released this week.
Dollar Supported By Renewed Trade Uncertainty
The dollar trended higher in the previous session amid a risk off sentiment. With no US economic data to focus on, dollar investors focus on US — China trade headlines.
Earlier in the week optimism that he two powers would reach a trade deal, possibly this month sent the US stock market soaring, lifting the dollar. Yesterday reports that President Xi and President Trump may not now sign a phase one trade deal until December unnerved investors denting risk=k appetite. When risk appetite falls, investors often look to buy into the US dollar for its safe haven properties. Ss a result, the dollar advanced.
Today there are a few pieces of mid-tier macro-economic data which could attract the attention of some dollar traders. Otherwise trade headlines will continue to be the principal driver of 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. |
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