Mon. May 29th, 2023

The Euro US Dollar (EUR/USD) exchange rate rose on Wednesday. The currency pair was bolstered by several better-than-expected data releases for the Eurozone. Additionally, bets on a 50bps interest rate hike from the European Central Bank (ECB) at their next meeting helped to boost EUR/USD.
At time of writing the EUR/USD exchange rate was at around 1.0492, which was up roughly 0.2% from that morning’s opening figures.
The Euro (EUR) climbed on Wednesday. The single currency potentially saw a boost from a retreat in global risk appetite. Better-than-expected data releases for the Eurozone also added to EUR’s upward momentum.
Wednesday saw an upward revision in the third estimate of third quarter GDP growth figures for the Eurozone.
The data printed growth of 0.3% versus the forecast 0.2% as increased household and business spending lend support to the trading bloc’s economy. Experts are predicting a recession in the Eurozone’s fourth quarter however amid soaring energy costs.
A lower-than-forecast fall in Germany’s industrial production for October also pushed EUR higher. The overall impressions from the data were not positive however, with the more gradual slip into negative territory still set to bring about a recession. It’s thought that stimulus from the German government helped to limit the slump in October.
‘Today’s industrial production data has two messages: German industry, excluding energy-intensive sectors, is more resilient than some pessimists had thought but at the same time, the gradual slide into recession still looks unavoidable.’

bannerThe Euro saw further support on Wednesday from the European Central Bank’s (ECB) continued hawkish stance. Markets continued to price in a 50bps interest rate hike from the central bank at their December meeting.
Consumer expectations of further rises in Eurozone inflation added to expectations of more aggressive action from the ECB. The latest survey from the central bank saw median inflation expectations over the next 12 months rise to 5.4% in October.
The US Dollar (USD) stumbled on Wednesday. A downturn in US Treasury bond yields weighed on the currency.
The safe-haven ‘Greenback’ struggled to benefit from the prevalent risk-off market mood, although the sentiment likely helped limit USD’s losses amid fears of a global recession.
USD also saw its losses capped by persistent market bets on a bumper interest rate hike from the Federal Reserve.
Following robust jobs data last week, investors are now anticipating a minimum 50bps interest rate hike at the central bank’s next meeting.

EUR/USD Exchange Rate Forecast: Will PPI Uptick Add to Bets on Bumper Fed Rate Hike?

Looking ahead for the US Dollar, the forecast uptick in initial jobless claims on Thursday could do little to deter bets on a tight labour market. The latest figures are expected to remain close to the previous week’s. If the data prints as forecast, then it could bolster USD.
On Friday, a predicted slight uptick in November’s producer price inflation could also boost the currency. PPI figures are expected to have remained stagnant last month, although core PPI is forecast to rise. The data could add further fuel to Fed rate hike bets and push USD higher.
Also on Friday, December’s consumer sentiment figures are expected to edge higher although remain close to its June lows. The data could dent confidence in the US Dollar.
USD could also be affected by any further shifts in Fed rate hike expectations this week. Markets now seem to be gravitating toward a larger rate hike from the central bank.
For the Euro, two speeches from ECB President Christine Lagarde on Thursday could prompt fresh movement in the single currency. Recent speeches from ECB policymakers have signalled support for a 50bps rate hike. If Lagarde also sticks to this hawkish path, then it could boost EUR.

Save money on your currency transfers with TorFX, voted International Money Transfer Provider of the Year 2016 – 2020. Their goal is to connect clients with ultra competitive exchange rates and a uniquely dedicated service whether they choose to trade online or over the telephone. Find out more here.
Adam Solomon
Adam has almost a decade of experience working in one of the UK’s leading currency brokers and has been…
Contact Adam Solomon
December 29 2022
Today’s reference EUR/USD exchange rate: 1.06202 US Inflation Developments Crucial Timing a Fed Monetary Policy Pivot US and Global Recession Risks ECB Talks Tough on Inflation Can the…
December 04 2022
2023-2024 exchange rate forecasts from investment bank Nordea – update December 2022. The Federal Reserve will have to increase rates to above 5.00% to curb inflation. The dollar is set to…
December 29 2022
GBP/USD exchange rate forecast UK in Recession, Economy Liable to Lag G7 Rivals Risk of Sticky Inflation Bank of England between a Rock and Hard Place The Plague of Twin Deficits Strikes and…
» Compare best exchange rates
» Best euro rate?
» Best Dollar rate?
» Best Australian Dollar rate?
» Best Canadian Dollar rate?

Copyright © 2006-2021 Exchange Rates UK. All rights reserved. The advice provided on this website is general advice only and does not constitute as a financial recommendation. Any news, opinions, research, analysis, values or other information contained on this story, by Exchange Rates UK, its employees, partners or contributors, is provided as general market commentary. Exchange Rates UK will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.


By admin

Leave a Reply

Your email address will not be published. Required fields are marked *