{"id":11351,"date":"2019-10-03T06:00:24","date_gmt":"2019-10-03T10:00:24","guid":{"rendered":"https:\/\/currencylive.com\/?p=11351"},"modified":"2019-10-03T05:50:13","modified_gmt":"2019-10-03T09:50:13","slug":"101206-eur-usd-euro-advance-on-strong-retail-sales-despite-trade-tariffs","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/101206-eur-usd-euro-advance-on-strong-retail-sales-despite-trade-tariffs\/","title":{"rendered":"EUR\/USD: Euro Advance On Strong Retail Sales &#038; Despite Trade Tariffs"},"content":{"rendered":"<p>The euro gained versus the dollar for the second straight session on Wednesday amid growing concerns over the health of the US economy. The pair closed 0.25% higher at US$1.0961. The euro is extending gains versus the dollar in early trade on Thursday.<\/p>\n<p>The euro advanced in early trade on Thursday thanks to eurozone retail sales rebounding in August. Data published by the EU\u2019s statistics agency Eurostat showed that retail sales increased by 0.3% month on month in August, and 2.1% compared to a year earlier. The solid readings indicate that consumer spending remains resilient in the bloc despite the manufacturing slump. This is important because a strong consumer spending could help prevent the bloc from slipping into recession, even as the manufacturing sector continues to contract.<\/p>\n<p>Retail sales figures are closely watched because economists consider them to be a forward-looking gauge for inflation. Stronger retail sales figures point to higher inflation down the line. As a result, the euro advanced.<\/p>\n<p>However, gains in the common currency have been limited as investors also fret over the announcement of new US tariffs on European goods. The Trump administration is taking advantage of the World Trade Organisation (WTO) ruling against the EU for subsidising the European Aviation giant Airbus. The move has angered Europe, damaging already fragile US &#8211; EU relations. Tariffs on European products could have a negative impact on business confidence and eurozone economies.<\/p>\n<h3><strong>Weak US Job Creation &amp; Manufacturing Hits Dollar<\/strong><\/h3>\n<p>The dollar fell for a second straight session on Wednesday as US recession fears grew. The US ADP private payroll report showed that 135,000 jobs were created in September. August\u2019s figure was revised downward by 38,000 to 157,000. The monthly average is now just 145,000 compared to 214,000 this time last year. The significant decline in hiring indicates that demand for hiring has weakened.<\/p>\n<p>This, combined with the weakest manufacturing output in a decade is unnerving investors. Concerns are growing that the US could be heading towards a recession and that the Federal Reserve will need to cut interest rates again in the coming months.<\/p>\n<table width=\"602\">\n<tbody>\n<tr>\n<td><strong>Why do interest rate cuts drag on a currency\u2019s value?<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Interest rates are key to understanding exchange rate movements. Those who have large sums of money to invest want the highest return on their investments. Lower interest rate environments tend to offer lower yields. So, if the interest rate or at least the interest rate expectation of a country is relatively lower compared to another, then foreign investors look to pull their capital out and invest elsewhere. Large corporations and investors sell out of local currency to invest elsewhere. More local currency is available\u00a0 as the demand of that currency declines, dragging the value lower.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p>Today dollar investors will look towards US non-manufacturing pmi figures. Given the dominance of the service sector in the US economy a strong reading has the potential to calm recession fears. Equally a weak reading could send the dollar sharply lower.<\/p>\n<p>&nbsp;<\/p>\n<table width=\"602\">\n<tbody>\n<tr>\n<td><strong>What do these figures mean?<\/strong><\/td>\n<\/tr>\n<tr>\n<td>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.<\/p>\n<p>For example, it could be written:<\/p>\n<p><em>1 EUR = 1.12829 USD<\/em><\/p>\n<p>Here, \u20ac1 is equivalent to approximately $1.13. This specifically measures the euro\u2019s worth against the dollar. If the U.S. dollar amount increases in this pairing, it\u2019s positive for the euro.<\/p>\n<p>Or, if you were looking at it the other way around:<\/p>\n<p><em>1 USD = 0.88789 EUR<\/em><\/p>\n<p>In this example, $1 is equivalent to approximately \u20ac0.89. This measures the U.S. dollar\u2019s worth versus the euro. If the euro number gets larger, it\u2019s good news for the dollar.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<h6><em>This publication is provided as general information only and is not intended as an exhaustive treatment of its subject. TransferWise Inc. and its affiliates (&#8220;we&#8221; or &#8220;us&#8221;) expressly disclaim any contractual or fiduciary relationship with you on the basis of the content of this publication, and you may not rely thereon for any purpose. You should consult with qualified professionals or specialists before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from us.\u00a0 We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date, and DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.<\/em><\/h6>\n","protected":false},"excerpt":{"rendered":"<p>The euro gained versus the dollar for the second straight session on Wednesday amid growing concerns over the health of the US economy. The pair closed 0.25% higher at US$1.0961. The euro is extending gains versus the dollar in early trade on Thursday. The euro advanced in early trade on Thursday thanks to eurozone retail [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":3587,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1380,1381],"tags":[1581,1395,1393,1588,1457,1493,1430,1587,1482,1398,1584],"class_list":{"0":"post-11351","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-eur","8":"category-usd","9":"tag-adp","10":"tag-eur","11":"tag-euro","12":"tag-job-creation","13":"tag-manufacturing","14":"tag-nfp","15":"tag-retail-sales","16":"tag-trade-tariffs","17":"tag-us-dolar","18":"tag-usd","19":"tag-wto"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>EUR\/USD: Euro Advance On Strong Retail Sales &amp; Despite Trade Tariffs - Currency Live<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/currencylive.com\/news\/101206-eur-usd-euro-advance-on-strong-retail-sales-despite-trade-tariffs\/\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Fiona Cincotta\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101206-eur-usd-euro-advance-on-strong-retail-sales-despite-trade-tariffs\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101206-eur-usd-euro-advance-on-strong-retail-sales-despite-trade-tariffs\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"EUR\\\/USD: Euro Advance On Strong Retail Sales &#038; 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