{"id":3726,"date":"2017-06-15T00:00:00","date_gmt":"2017-06-15T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100107-eur-usd-fed-reserve-rate-hike\/"},"modified":"2017-06-15T00:00:00","modified_gmt":"2017-06-15T04:00:00","slug":"100107-eur-usd-fed-reserve-rate-hike","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100107-eur-usd-fed-reserve-rate-hike\/","title":{"rendered":"Euro Dips Against Dollar as US Fed Raises Rates"},"content":{"rendered":"<p>The euro U.S. dollar exchange rate dipped late on Tuesday as the dollar strengthened. The exchange rate fell from its highest level for the euro in almost 8 months. From a $1.1294 peak to a low of $1.1194 before stabilizing at $1.1215.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>What do these figures mean? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>\n<p> 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: <em>1 EUR = 1.12829 USD<\/em> <\/p>\n<p> <em>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.<\/em> <\/p>\n<p> Or, if you were looking at it the other way around: <em>1 USD = 0.88789 EUR<\/em> <\/p>\n<p> <em>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.<\/em> <\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>The dollar strengthened after the U.S. Federal Reserve voted to increase the U.S. interest rate by 0.25%. In a show of confidence in the U.S. economy, the Fed gave an upbeat statement saying that economic growth \u201chas been rising moderately so far this year.\u201d The Fed made no mention of the weaker data over winter and also downplayed recent weak inflation data. Federal Reserve Chair, Janet Yellen, made it clear that the monetary policy committee\u2019s expectations were essentially unchanged since the last meeting in March. This was actually a more positive outlook than investors were expecting, which has helped to increase interest rate expectations going forward. When interest rate expectations increase so does the value of the currency, which is why the dollar rose.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why do raised interest rates boost a currency\u2019s value? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\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. Higher interest rate environments tend to offer higher yields. So, if the interest rate or at least the interest rate expectation of a country is relatively higher compared to another, then it attracts more foreign capital investment. Large corporations and investors need local currency to invest. More local currency used then boosts the demand of that currency, pushing the value higher. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<p>With the big hike decision out of the way, the market will refocus on U.S economic data. Today sees the release of initial U.S. jobless claims in addition to U.S. industrial production figures. If these numbers are strong, then the dollar could be further supported versus the euro, bringing the euro U.S dollar exchange rate even lower for the euro.<\/p>\n<table class=\"table table-bordered\">\n<thead>\n<tr>\n<th>Why does strong economic data boost a country\u2019s currency? <\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Solid economic indicators point to a strong economy. Strong economies have strong currencies because institutions look to invest in countries where growth prospects are high. These institutions require local currency to invest in the country, thus increasing demand and pushing up the money\u2019s worth. So, when a country or region has good economic news, the value of the currency tends to rise. <\/td>\n<\/tr>\n<\/tbody>\n<\/table class=\"table table-bordered\">\n<h2><a href=\"#euro-looking-for-a-deal-at-eurogroup-meeting-with-greece\" name=\"euro-looking-for-a-deal-at-eurogroup-meeting-with-greece\"><\/a>Euro looking for a deal at Eurogroup meeting with Greece<\/h2>\n<p>Meanwhile eurozone data has also been impressing investors. The euro had a strong start to the previous session after employment data for the block beat analysts\u2019 initial forecasts. The eurozone experienced a rise in employment both on a yearly basis and a monthly basis. Industrial production also showed a solid increase in April.<\/p>\n<p>Looking ahead, investors will be watching for any developments at the Eurogroup meeting. Time is ticking for the group of eurozone finance ministers to strike a deal with Greece in order to unlock the next tranche of bailout money. Greece needs these funds in order to meet a repayment deadline with its creditors in July. Whilst there is still plenty of time, the markets will be keen for the agreement to be done. Should Greece fail to strike a deal at this meeting, the euro could come under some pressure as concerns pick up over Greece\u2019s economic stability.<\/p>\n<table class=\"table table-bordered\">\n<tbody>\n<tr>\n<td>\n<p><small><em><br \/>\nThis publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice 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 or other professional advice from TransferWise Inc., Currency Live or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. Consult our <a href=\"https:\/\/currencylive.com\/risk-warning\/\">risk warning<\/a> page for more details.<\/em><\/small><\/p>\n<p><small><em>This article was initially published on TransferWise.com from the same author. The content at Currency Live is the sole opinion of the authors and in no way reflects the views of TransferWise Inc.<\/em><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The euro U.S. dollar exchange rate dipped late on Tuesday as the dollar strengthened. The exchange rate fell from its highest level for the euro in almost 8 months. From a $1.1294 peak to a low of $1.1194 before stabilizing at $1.1215. What do these figures mean? When measuring the value of a pair of [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":3727,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1380,1379,1381],"tags":[1395,1398],"class_list":{"0":"post-3726","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-eur","8":"category-gbp","9":"category-usd","10":"tag-eur","11":"tag-usd"},"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Euro Dips Against Dollar as US Fed Raises Rates - 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\/100107-eur-usd-fed-reserve-rate-hike\/\" \/>\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\\\/100107-eur-usd-fed-reserve-rate-hike\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100107-eur-usd-fed-reserve-rate-hike\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"Euro Dips Against Dollar as US Fed Raises Rates\",\"datePublished\":\"2017-06-15T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100107-eur-usd-fed-reserve-rate-hike\\\/\"},\"wordCount\":846,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100107-eur-usd-fed-reserve-rate-hike\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100107-eur-usd-fed-reserve-rate-hike.jpg\",\"keywords\":[\"eur\",\"usd\"],\"articleSection\":[\"EUR\",\"GBP\",\"USD\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2017\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100107-eur-usd-fed-reserve-rate-hike\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100107-eur-usd-fed-reserve-rate-hike\\\/\",\"name\":\"Euro Dips Against Dollar as US Fed Raises Rates - 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