{"id":5883,"date":"2019-08-29T03:09:49","date_gmt":"2019-08-29T07:09:49","guid":{"rendered":"https:\/\/currencylive.com\/?p=5883"},"modified":"2019-08-29T03:09:49","modified_gmt":"2019-08-29T07:09:49","slug":"101117-eur-usd-euro-rises-ahead-of-german-inflation-us-gdp-data","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/101117-eur-usd-euro-rises-ahead-of-german-inflation-us-gdp-data\/","title":{"rendered":"EUR\/USD: Euro Rises Ahead Of German Inflation & US GDP Data"},"content":{"rendered":"

The euro US dollar exchange rate closed flat on Wednesday. The pair closed at US$1.1085. This was approximately the same level that it had started Wednesday\u2019s session at. The euro is advancing versus the dollar in early trade on Thursday.<\/p>\n

 <\/p>\n\n\n\n\n
What do these figures mean?<\/strong><\/td>\n<\/tr>\n
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

For example, it could be written:<\/p>\n

1 EUR = 1.12829 USD<\/em><\/p>\n

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

Or, if you were looking at it the other way around:<\/p>\n

1 USD = 0.88789 EUR<\/em><\/p>\n

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>\n

Euro investors reacted to Italian political news in the previous session. After tense negotiations the 5 Star Movement and the centre left Democratic Party agreed to form a coalition. The new coalition comes following the collapse of the previous coalition last week. This means that Italy will avoid a problematic Autumn election. It also means that the League\u2019s Matteo Salvini will remain out of power a while longer. Polls had indicated that Matteo Salvini was well ahead should there be an election. The avoidance of an election is good news for the euro, given Salvini\u2019s plans to spend heavily regardless of Italy\u2019s soaring debt piles.<\/p>\n

Today euro investors will be switching their attention back to Germany and growing fears that Europe\u2019s largest economy is heading for a recession. Analysts expect German unemployment figures to show that unemployment remains steady at 5%.<\/p>\n

The euro may come under pressure following the release of German inflation figures. Analysts are predicting German inflation will decline to 1.5% year on year in August, down from 1.7% the previous month. Weak inflation could encourage the European Central Bank to cut interest rates when they meet in September.<\/p>\n

 <\/p>\n\n\n\n\n
Why do interest rate cuts drag on a currency\u2019s value?<\/strong><\/td>\n<\/tr>\n
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\u00a0as the demand of that currency declines, dragging the value lower.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\u00a0<\/strong><\/p>\n

US GDP Data To Dip 0.1%?<\/strong><\/h3>\n

The dollar has risen across the past few months boosted by its safe haven appeal amid the recent escalations of the US \u2014 Sino trade war. The next round of tariffs is due to take effect from 1st<\/sup> September. Furthermore, there is no clear plan for next steps in negotiations, as a result investor are looking to buy into safe havens, such as the dollar for protection from uncertainty.<\/p>\n

Today the US GDP reading will be in focus. Analysts are expecting economic growth to have dipped 0.1% to 2%. The dominant consumer sector remains solid and the labour market strong, therefore the slump in the manufacturing sector owing to the trade war is not expected to cause a significant decline in US economic growth. \u00a0Should the GDP drop by more than forecast, the dollar could drop.<\/p>\n

 <\/p>\n\n\n\n\n
Why does poor economic data drag on a country\u2019s currency?<\/strong><\/td>\n<\/tr>\n
Slowing economic indicators point to a slowing economy. Weak economies have weaker currencies because institutions look to reduce investments in countries where growth prospects are low and then transfer money to countries with higher growth prospects. These institutions sell out of their investment and the local currency, thus increasing supply of the currency and pushing down the money\u2019s worth. So, when a country or region has poor economic news, the value of the currency tends to fall.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

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The content on our site is provided for general information only. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or retain from, any action on the basis of the content on our site.<\/em><\/h6>\n
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 <\/p>\n","protected":false},"excerpt":{"rendered":"

The euro US dollar exchange rate closed flat on Wednesday. The pair closed at US$1.1085. This was approximately the same level that it had started Wednesday\u2019s session at. The euro is advancing versus the dollar in early trade on Thursday.   What do these figures mean? When measuring the value of a pair of currencies, […]<\/p>\n","protected":false},"author":163946597,"featured_media":5541,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1380,1381],"tags":[1471,1395,1393,1387,1470,1431,1397,1398],"class_list":["post-5883","post","type-post","status-publish","format-standard","has-post-thumbnail","category-eur","category-usd","tag-5-star-movement","tag-eur","tag-euro","tag-inflation","tag-italiy-elections","tag-trade-war","tag-us-dollar","tag-usd"],"acf":[],"yoast_head":"\nEUR\/USD: Euro Rises Ahead Of German Inflation & US GDP Data - 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\/101117-eur-usd-euro-rises-ahead-of-german-inflation-us-gdp-data\/\" \/>\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\\\/101117-eur-usd-euro-rises-ahead-of-german-inflation-us-gdp-data\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101117-eur-usd-euro-rises-ahead-of-german-inflation-us-gdp-data\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"EUR\\\/USD: Euro Rises Ahead Of German Inflation & US GDP Data\",\"datePublished\":\"2019-08-29T07:09:49+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101117-eur-usd-euro-rises-ahead-of-german-inflation-us-gdp-data\\\/\"},\"wordCount\":872,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101117-eur-usd-euro-rises-ahead-of-german-inflation-us-gdp-data\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100610-gbp-eur-german-industrial-figures.jpg\",\"keywords\":[\"5 star movement\",\"eur\",\"euro\",\"Inflation\",\"italiy elections\",\"trade war\",\"us dollar\",\"usd\"],\"articleSection\":[\"EUR\",\"USD\"],\"inLanguage\":\"en-US\",\"copyrightYear\":\"2019\",\"copyrightHolder\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#organization\"}},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101117-eur-usd-euro-rises-ahead-of-german-inflation-us-gdp-data\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101117-eur-usd-euro-rises-ahead-of-german-inflation-us-gdp-data\\\/\",\"name\":\"EUR\\\/USD: Euro Rises Ahead Of German Inflation & US GDP Data - 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