The euro US dollar exchange rate closed the previous week at US$1.1017. This was approximately the same level that the pair had started the week at. The euro is edging higher versus the US dollar as trading kicks off for the new week.
The euro showed some resilience in the previous week although it failed to capitalise on a slow week for the dollar. Data over the past week showed some signs of the eurozone economy slowly turning a corner after months of economic slowdown.
Today investors will focus on German manufacturing pmi data. Analysts are predicting that the sector will remain deep in contraction in November as the sector remains caught up in the US — China trade dispute and slowing global demand. Any signs of improvement could underpin the euro. Christine Lagarde is due to speak later today which could drive movement in the euro.
Trade News & US Jobs Data Later In The Week
November was a strong month for the US dollar. It traded higher versus all major peers. US policy makers lowered interest rates for the third time at the end of October. However, they made it clear that despite the ongoing US — China trade dispute and slowing global economy, no more easing was necessary.
Trade will remain in focus after Trump signed the Hong Kong bill into law last week and China, over the weekend, insisted that a phase one trade deal must include rolling back the US tariffs
This past week was a quiet week owing to the Thanksgiving holiday. Data was broadly supportive of the dollar with US GDP second reading for the third quarter revised higher. The US stock markets hit record levels and analysts expect the holiday shopping season, which started with Black Friday to be strong. This would be good news for the US economy and inflationary pressure.
Today data from Black Friday showed provide some clues as to how the US consumer is expected to hold up across this crucial month.
Looking ahead this week there are plenty of data points to attract investors’ attention. Friday’s no farm payrolls will be the most keenly awaited. Today’s ISM manufacturing numbers will also be of interest. Analysts are predicting that manufacturing activity contracted again in November, but less so that in October. A solid reading could boost 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.