Euro to US Dollar (EUR/USD) Exchange Rate Forecast to Trend Narrowly despite Unexpected Decrease in US Pending Home Sales
EUR/USD Conversion Rate Predicted to Trend within a Tight Range Today
With market volatility subdued as we approach year-end, the Euro to US Dollar (EUR/USD) exchange rate was trending within a limited range on Wednesday afternoon.
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The most significant European economic data publication this week produced a weaker-than-anticipated result, but the Euro avoided depreciation amid speculation that the European Central Bank (ECB) may not need to expand quantitative easing in 2016 if inflation picks up. November’s Eurozone M3, which is the broadest measure of money supply in use by Eurozone nations, was forecast to advance by 5.2% annually, but the actual result only saw 5.1% growth. The lack of Euro depreciation may be the result of November’s annual Eurozone Loan Growth data which advanced by 1.4%, bettering the median market forecast 1.3%.
Whilst the Euro has avoided depreciation of late it has also failed to rack up any notable gains. This is mainly due to mounting uncertainty regarding Spain’s political outlook. The acting Prime Minister’s attempts to unify several parties has seemingly fallen on deaf ears. ‘Markets seem to be betting that some kind of sensible solution will ultimately emerge. Frankly, I see a bit more risk than the markets are expecting,’ said Antonio Rodríguez-Pina, chairman of Deutsche Bank in Spain. ‘There is a risk of early elections. There is a risk of a leftwing alliance that includes radical parties. And there is a risk that, even if the Popular party manages to get Mariano Rajoy reappointed, many of its policies will be mortgaged by the Socialists,’ he said.
The Euro to US Dollar (EUR/USD) exchange rate is currently trending in the region of 1.0917.
USD/EUR Conversion Rate Predicted to Hold Steady despite Disappointing US Data
Of all the major assets the US Dollar has seen the greatest volatility this week thanks to a significant number of domestic ecostats compared with other major economies. Today’s US economic data produced disappointing results which has seen the US Dollar hold steady versus its peers. Amid speculation that the ‘Greenback’ (USD) is significantly overvalued, a number of analysts forecast US Dollar weakness in early 2016 as investors attempt to readjust trade weighting. However, the Federal Reserve is expected to hike the benchmark interest rate at least twice in 2016 which accounts for the resilience of the ‘Buck’ (USD) as 2015 draws to a close.
November’s US Pending Home Sales was predicted to advance by 0.7% on the month but the actual result unexpectedly contracted by -0.9%. On an annual basis, November’s Pending Home Sales advanced by 2.7%, missing the market consensus of 3.5% growth. ‘Home prices rising too sharply in several markets, mixed signs of an economy losing momentum and waning supply levels have acted as headwinds in recent months,’ NAR chief economist Lawrence Yun said in a statement. ‘Available listings that are move-in ready and in affordable price ranges remain hard to come by.’
The Euro to US Dollar (EUR/USD) exchange rate dropped to a low of 1.0907 during Wednesday’s European session.
Euro to US Dollar (EUR/USD) Exchange Rate Forecast: US Labour Market Data to Provoke Volatility
With a distinct lack of European economic data on Thursday, the Euro to US Dollar (EUR/USD) exchange rate will see volatility in response to US Continuing Claims and Initial Jobless Claims data. With that being said, thin trading volumes could see Euro changes in response to Greek Retail Sales data. With most markets closed on Friday in celebration of New Year’s Day, there is also the potential that the Euro to US Dollar (EUR/USD) exchange rate will hold steady on Thursday amid quiet trade.
The Euro to US Dollar (EUR/USD) exchange rate climbed to a high of 1.0944 during Wednesday’s European session.