Euro to US Dollar (EUR/USD), Swiss Franc (EUR/CHF) Exchange Rates Advance after German IFO Indexes, US Durable Goods, Fed Statements
The Euro to US Dollar (EUR/USD) and Euro to Swiss Franc (EUR/CHF) exchange rates both gained in Wednesday’s European session after German IFO ecostats printed favourably and US data disappointed.
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The Euro was offered some support when Germany’s IFO Business Climate index jumped to 107.9 in March rather than the 107.3 forecast. Furthermore, the German Expectations index also clambered up above predictions at 103.9 from 102.5.
IFO President Hans-Werner Sinn commented: ‘Companies were more satisfied with their current business situation. They also expressed far greater optimism about future business developments. The German economy continues to expand.’
The increase in optimism has been one factor accredited to the recent quantitative easing (QE) programme implemented by the European Central Bank (ECB).
Economist Carsten Brezeki stated: ‘All in all, it looks as if the ECB and QE enable the German economy to extend its golden cycle without any new reforms.’
The US Dollar was offered little support when US Durable Goods Orders recorded a -1.4% contraction in February after January’s negatively revised 2.0% gain rather than rising by the forecast 0.2%.
Economist Stephen Stanley commented: ‘Businesses have been extremely cautious. The economy hasn’t been especially strong. In particular, people have had their doubts about the sustainability of growth.’
Federal Reserve Rate Hike Speculation Pressures US Dollar (USD) Lower
Additionally, Federal Reserve official Charles Evans suggested that the Fed should hold off from hiking interest rates—a factor that could significantly pressure the US Dollar lower. Instead Evans suggests that a rate hike in 2015 should be off the cards until inflation rises significantly.
Evans stated: ‘I see no compelling reason for us to be in a hurry to tighten financial conditions until then.’
Meanwhile, the Swiss UBS Consumption Indicator rose in February from 1.11 to 1.19. The consumption surge has been accredited to an increase in new car registrations.
Euro to US Dollar (EUR/USD) and Swiss Franc (EUR/CHF) Exchange Rate Forecast
The Euro to US Dollar (EUR/USD) exchange rate could be in for additional fluctuations on Thursday with the release of German GfK Consumer Confidence as well as Markit’s US Services and Composite Purchasing Managers Indexes (PMI).
Swiss National Bank board member Fritz Zurbruegg is scheduled to speak on Thursday which could influence the Franc somewhat.
The Euro to US Dollar (EUR/USD) exchange rate is trading at 1.0983. The Euro to Swiss Franc (EUR/CHF) exchange rate is trending in the region of 1.0538.