Euro to US Dollar (EUR/USD) Exchange Rate Falling; Declines Forecast by Economists
The Euro (EUR) is currently trading down against the US Dollar (USD) in the EUR/USD exchange rate at 1.3521. The Euro has shown highs of 1.3549 and lows of 1.3517 so far on Monday.
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The Euro is precarious whilst speculation circulates regarding the downed Malaysian Airlines passenger flight that has caused geopolitical tensions to rise.
However, despite the Euro gaining slightly on Monday, economists are forecasting a downward trajectory for the Euro against other major currencies.
Barclays representative Mitul Kotecha has commented: ‘There is not a great deal of first-tier data either and investors have one eye on geo-political events, all of that is a recipe for generally lacklustre trading.’
Furthermore the US is surrounded by rate hike speculation after the Chairwoman for the Federal Reserve, Janet Yellen, recently stated that rate hikes could happen sooner than expected if the US job market continues to create vacancies causing unemployment to shrink.
Currency expert, Patrick Bennett, commented: ‘Growth in the US is soft and rate hikes are further away. So the recent ranges that have held in the Euro/Dollar should be respected.’
However the Euro looks set to continue its downward notion with economists predicting it’s going to fall.
Kotecha continued: ‘Overall, we still believe the Euro is going to face more downside pressure. The chances are we’re going to see more aggressive action from the ECB in coming months. We prefer selling the Euro versus the Yen and Sterling.’
Conversely the US Dollar could fluctuate this week dependant on the outcome of Consumer Price Index and Unemployment data. Investors will eye the Continuing Claims and Initial Jobless Claims data on Thursday which is one of the factors currently affecting interest rate hike decisions.
The Initial Jobless Claims figure is presently forecast to rise by 310K, more than the previous 302K. Moreover Continuing Claims is also expected to prove disappointing with a rise to 2510K from the former 2507K.
However, the US Dollar may see some strength with Manufacturing PMI statistics, which are forecast to rise to 57.5 in July, higher than June’s 57.3.
The Euro could gain influence through the Eurozone Consumer Confidence data on Wednesday, as well as a range of PMI publications on Thursday which are all currently predicted to drop; if a fall in statistics materialises, the Euro could soften in line with economists’ predictions.
For now it appears the Euro will be bearish in the currency market, in line with economists’ predictions, the US Dollar to Euro (USD/EUR) exchange rate is presently trading up, residing at 0.7395.