The euro US dollar exchange rate traded within a tight range on Monday, Martin Luther King Day and public holiday in US. A lack of influential eurozone data kept the euro on an even keel as well. The pair closed the session flat, a touch below US$1.11. The euro is holding steady versus the US dollar in early trade on Tuesday.
In the absence of high impacting eurozone data, moves in the euro were muted on Monday. Instead investors looked ahead to the European Central Bank monetary policy meeting later this week. Market participants are not expecting the central to adjust monetary policy. However, there could still be some volatility injected into the euro as the ECB start the highly anticipated strategy review. This could involve altering the inflation target, a move which could boost or hit the euro depending on which way it is moved, if at all.
Today the euro could receive a boost from the release of the ZEW sentiment index. Analysts forecast that both the German expectations component of the report and the current situation component will show improvements in December. Any hints of recovering confidence in Europe’s largest economy could be an indication that the slump is bottoming out.
Trump’s Impeachment Trial In Focus
The US dollar experienced low volumes and low volatility on the public holiday MLK day. Whist currency markets were still trading US banks and investment institutions were closed. Despite that lack of fresh trading catalysts, the greenback held gains acquired across the previous week from a slew of data which showed hat the US economy was holding up well.
Traders barely reacted to the news that President Trump and French President Emmanuel Macron agreed a trade tariff truce until the end of the year to allow time for further negotiations. The easing of tensions between the two sides could weigh on the safe haven dollar as US traders return to their desks today.
With little on the US economic calendar to grab US dollar investor’s attention, eye could swing towards President Trump’s impeachment trial. The impact on the dollar is expected to be limited given that the Republican’s control the upper house.
|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.