{"id":3806,"date":"2017-06-29T00:00:00","date_gmt":"2017-06-29T04:00:00","guid":{"rendered":"https:\/\/currencylive.com\/100147-usd-eur-ecb-volatile\/"},"modified":"2017-06-29T00:00:00","modified_gmt":"2017-06-29T04:00:00","slug":"100147-usd-eur-ecb-volatile","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/100147-usd-eur-ecb-volatile\/","title":{"rendered":"Euro Higher Versus US Dollar as Investors Unconcerned Over Draghi Misj"},"content":{"rendered":"<p>The EUR\/USD exchange rate had a volatile session on Wednesday adding to the sharp gains from Tuesday\u2019s session. The euro strengthened by 0.3% against the dollar, hitting a high of $1.1390, whilst the day\u2019s low was some 100 points lower.<\/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>Tuesday saw the euro hit a one year high versus the dollar, after European Central Bank (ECB) President Mario Draghi hinted towards a tightening of monetary policy in the eurozone. Draghi acknowledged a broad recovery in the region whilst pointing out that inflation was still below where it needed to be. However, a subtle shift in language created a stir among investors.<\/p>\n<p>The markets were hoping for an encore on Draghi\u2019s second day of speaking at the ECB Central Bankers Forum in Portugal. However, they were disappointed. The ECB instead said that the market had misjudged Draghi\u2019s previous comments, reining back interest rate expectations, which had increased following Draghi\u2019s speech. When interest rate expectations decrease the currency value drops.<\/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>The euro dived 0.7%. Nevertheless, it was quick to recover, finishing the session 0.3% higher versus the buck thanks to dollar weakness.<\/p>\n<p>Today\u2019s focus moves away from central bankers and back towards economic data. The eurozone economic sentiment indicator gives an insight into consumer confidence in economic activity. A reading that is stronger than what analysts anticipate could boost the value of 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<h3><a href=\"#dollar-remains-out-of-favour\" name=\"dollar-remains-out-of-favour\"><\/a>Dollar remains out of favour<\/h3>\n<p>The mood for the dollar has been weak. Concerns are rife that Trump will be unable to push his pro-dollar agenda through Senate. Additionally, recent economic data has been disappointing on a regular basis. Yesterday\u2019s pending home sales were just another example of weakness in the U.S. economy. Earlier in the month construction data was softer and durable goods orders this week came in twice as bad as analysts had forecast.<\/p>\n<p>Today investors will be anxiously glancing towards the final release of the U.S. GDP. The preliminary figure printed in May was 1.2% and the final release is forecast to be the same. Should the reading be lower than 1.2% then the dollar could continue to be under pressure heading towards the weekend.<\/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 EUR\/USD exchange rate had a volatile session on Wednesday adding to the sharp gains from Tuesday\u2019s session. The euro strengthened by 0.3% against the dollar, hitting a high of $1.1390, whilst the day\u2019s low was some 100 points lower. What do these figures mean? When measuring the value of a pair of currencies, one [&hellip;]<\/p>\n","protected":false},"author":163946597,"featured_media":3807,"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-3806","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 Higher Versus US Dollar as Investors Unconcerned Over Draghi Misj - 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\/100147-usd-eur-ecb-volatile\/\" \/>\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\\\/100147-usd-eur-ecb-volatile\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100147-usd-eur-ecb-volatile\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"Euro Higher Versus US Dollar as Investors Unconcerned Over Draghi Misj\",\"datePublished\":\"2017-06-29T04:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100147-usd-eur-ecb-volatile\\\/\"},\"wordCount\":810,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100147-usd-eur-ecb-volatile\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100147-usd-eur-ecb-volatile.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\\\/100147-usd-eur-ecb-volatile\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/100147-usd-eur-ecb-volatile\\\/\",\"name\":\"Euro Higher Versus US Dollar as Investors Unconcerned Over Draghi Misj - 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