US Dollar to Euro (USD/EUR) Exchange Rate at a Three-Month High
On Friday the US Dollar advanced on a bearish Euro as investors reacted to upbeat US economic reports.
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Although yesterday’s initial jobless claims figures showed an unexpected increase, the US manufacturing PMI jumped by more-than-anticipated, with output rising at its fastest pace for more than three years.
Markit economist Paul Smith said this of the report; ‘This provides further confirmation that industry will aid a rebound in US GDP in the second quarter, and other indicators from the survey suggest that the sector has plenty of momentum heading into the summer and beyond. Total workloads are up markedly, and manufacturers are gearing up for growth by purchasing inputs at a record rate’.
The US Dollar extended gains against the Euro on Friday as measures of business confidence for Germany, the Eurozone’s largest economy, fell by even more than expected in May.
UK news was thin on the ground today but the US Dollar still strengthened modestly against the Pound.
During North American trading a domestic report showed a 6.4 per cent increase in US new home sales in April, month-on-month.
While a monthly gain of 10.7 per cent had been forecast, the figure for March was positively revised to 6.9 per cent.
Before the data was published an economist with Wrightson ICAP stated; ‘The more reliable building permits data suggest that demand for new single-family homes bottomed out in the first quarter after a rate-related pullback in late 2013, and has resumed mild growth.’
Sales of new homes achieved a seasonally adjusted annual rate of 433,000, beating estimates for an annual pace of 420,000.
On a year-on-year basis the sales of new homes were down 4.2 per cent.
Next week significant US economic news can be expected to occur in response to a stream of US data including durable goods orders, Markit composite PMI, Markit services PMI, US consumer confidence, US initial jobless claims, pending home sales and final first quarter GDP.
Economists are predicting that the meagre US growth of 0.1 per cent recorded in the first quarter will be negatively revised.
If that proves to be the case the US Dollar could falter next week.
As it stands the US Dollar is trading against the British Pound in the region of 0.5937 and against the Euro in the region of 0.7336.