{"id":5916,"date":"2019-09-03T01:54:05","date_gmt":"2019-09-03T05:54:05","guid":{"rendered":"https:\/\/currencylive.com\/?p=5916"},"modified":"2019-09-03T01:54:05","modified_gmt":"2019-09-03T05:54:05","slug":"101127-eur-usd-euro-close-to-2-year-low-ahead-of-lagardes-speech","status":"publish","type":"post","link":"https:\/\/currencylive.com\/news\/101127-eur-usd-euro-close-to-2-year-low-ahead-of-lagardes-speech\/","title":{"rendered":"EUR\/USD: Euro Close To 2 Year Low Ahead Of Lagarde\u2019s Speech"},"content":{"rendered":"

A weaker euro and stronger dollar sent the euro US dollar exchange rate tumbling for a seventh straight session on Monday. The pair continued to lose ground overnight, dropping to\u00a0 a low of US$1.0931.<\/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

The euro was out of favour in the previous session as investors digested yet more weak data from Germany. The German manufacturing pmi showed that the sector remained deep in contraction in August. Weaker demand amid Brexit and the US \u2014 Sino trade dispute resulted few orders and German manufacturing firms scaling back production and cutting jobs. The pmi data showed that the manufacturing sector, which accounts for around 20% of economic activity in German was just 43.5. The figure 50 separate expansion from contraction.<\/p>\n

The weak data from Germany come following numbers last week that showed that inflation in Europe\u2019s largest economy fell by more than forecast and unemployment increased. Data is painting a dismal picture of Germany as fears grow that the economy is heading towards recession. The European Central Bank (ECB) will almost certainly take action when they meet in September, loosening monetary policy.<\/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\u00a0 as the demand of that currency declines, dragging the value lower.<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

 <\/p>\n

Today investors will look ahead to a speech by Christine Lagarde, the new ECB President from October. Any hints from Lagarde that she will continue Draghi\u2019s approach of accommodative policy could keep the euro under pressure.<\/p>\n

US Manufacturing Data In Focus<\/strong><\/h3>\n

The dollar strengthened across the previous session and has continued to rally overnight. Concerns over where the US \u2014 Sino trade dispute is heading, plus Brexit chaos is sending investors in search of safe heavens. The dollar, the reserve currency of the world, often gains in times of economic and or geopolitical uncertainty.<\/p>\n

Today investors will look towards US manufacturing data and US \u2014 Sino trade developments. US and Chinese officials struggle to agree on a schedule for talks this month which doesn\u2019t bode well for a speedy resolution to the ongoing dispute.<\/p>\n

Investors will be keen to see whether the trade war continues to negatively impact US manufacturing sector. Any signs of further weakness could weigh on demand for the dollar.<\/p>\n

<\/h6>\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
Although we make reasonable efforts to update the information on our site, we make no representations, warranties or guarantees, whether express or implied, that the content on our site is accurate, complete or up to date. Some of the content posted on this site has been commissioned by Us, but is the work of independent contractors. These contractors are not employees, workers, agents or partners of TransferWise and they do not hold themselves out as one. The information and content posted by these independent contractors have not been verified or approved by Us. The views expressed by these independent contractors on currencylive.com do not represent our views. <\/em><\/h6>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

A weaker euro and stronger dollar sent the euro US dollar exchange rate tumbling for a seventh straight session on Monday. The pair continued to lose ground overnight, dropping to\u00a0 a low of US$1.0931.   What do these figures mean? When measuring the value of a pair of currencies, one set equals 1 unit and […]<\/p>\n","protected":false},"author":163946597,"featured_media":5460,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1380,1381],"tags":[1399,1481,1413,1395,1393,1457,1454,1431,1400,1397,1398],"class_list":{"0":"post-5916","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-eur","8":"category-usd","9":"tag-china","10":"tag-christine-lagarde","11":"tag-ecb","12":"tag-eur","13":"tag-euro","14":"tag-manufacturing","15":"tag-pmi","16":"tag-trade-war","17":"tag-trump","18":"tag-us-dollar","19":"tag-usd"},"acf":[],"yoast_head":"\nEUR\/USD: Euro Close To 2 Year Low Ahead Of Lagarde\u2019s Speech - 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\/101127-eur-usd-euro-close-to-2-year-low-ahead-of-lagardes-speech\/\" \/>\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\\\/101127-eur-usd-euro-close-to-2-year-low-ahead-of-lagardes-speech\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101127-eur-usd-euro-close-to-2-year-low-ahead-of-lagardes-speech\\\/\"},\"author\":{\"name\":\"Fiona Cincotta\",\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/#\\\/schema\\\/person\\\/8ef0fafb6c93f1204150bb907b42cfec\"},\"headline\":\"EUR\\\/USD: Euro Close To 2 Year Low Ahead Of Lagarde\u2019s Speech\",\"datePublished\":\"2019-09-03T05:54:05+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101127-eur-usd-euro-close-to-2-year-low-ahead-of-lagardes-speech\\\/\"},\"wordCount\":754,\"image\":{\"@id\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101127-eur-usd-euro-close-to-2-year-low-ahead-of-lagardes-speech\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/currencylive.com\\\/news\\\/wp-content\\\/uploads\\\/2019\\\/08\\\/100954-gbp-eur-euro-slips-eurozone-data.jpg\",\"keywords\":[\"china\",\"Christine Lagarde\",\"ecb\",\"eur\",\"euro\",\"manufacturing\",\"pmi\",\"trade war\",\"trump\",\"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\\\/101127-eur-usd-euro-close-to-2-year-low-ahead-of-lagardes-speech\\\/\",\"url\":\"https:\\\/\\\/currencylive.com\\\/news\\\/101127-eur-usd-euro-close-to-2-year-low-ahead-of-lagardes-speech\\\/\",\"name\":\"EUR\\\/USD: Euro Close To 2 Year Low Ahead Of Lagarde\u2019s Speech - 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