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The euro US dollar exchange rate traded sideways at the start of the week. In a quiet session the pair traded within a familiar range as investors awaited the next catalyst. The euro is edging a few points higher in early trade on Tuesday.
The euro held steady in the previous session despite encouraging data from Germany. German export figures released on Monday raised hopes that Europe’s largest economy would avoid a contraction in the fourth quarter. German exports increased 1.2% month on month in October after a 1.5% increase month on month in September. The numbers show that despite the ongoing trade dispute between the US and China, German exports have remained resilient. However, the order books remain weak which doesn’t bode well for the outlook.
Today euro investors will remain focused on the eurozone economic calendar with the release of the German and eurozone ZEW surveys for December. Analysts are expecting the German sentiment gauge to rise to 0 from -2.1. Meanwhile the eurozone print is expected to decline from -1 to -17. A weaker reading than forecast could unnerve investors and send the euro lower.
Quiet Session Expected Ahead Of FOMC
The US dollar had a dull session on Monday in the absence of any influential economic data and amid tensions in the ongoing US — China trade dispute. Trade headlines remain mixed with no clear indication as to whether a phase one trade deal will be reached soon. Investors are looking for signs as to whether the Trump administration will apply the next round of tariffs due on 15th December. The US Agriculture Secretary Soony Perdue said that he doesn’t believe they will be implemented.
Today the US economic calendar is quiet, investors will look ahead to tomorrow’s Federal Reserve interest rate decision. After three rate cuts across the year and a solid labour market the Fed are expected to keep interest rates on hold. Instead dollar investors will pay more attention to the press conference and the dot plot, to gain a clearer understanding of where the Fed sees interest rates going over the coming years.
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| 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. |
