EUR/USD Exchange Rate Falls as Euro Traders Brace for Brexit Vote
The Euro US Dollar (EUR/USD) exchange rate is down by nearly 0.2% today and is currently trading around $ 1.1311 on the inter-bank market.
EUR fell against the stronger US Dollar today despite the publication of the year-on-year German Harmonised Index of Consumer Prices figures for February holding steady at 1.7%.
These were followed by the publication of the monthly German CPI figures, however, which came in lower-than-expected at 0.4% against the consensus of 0.5%.
Many Euro traders, however, are focusing on Brexit developments today as the UK braces itself for the vote on a possible extension to Article 50, which will potentially delay the process until 30 June.
US President Donald Trump, however, has aggravated fears of a potential no-deal between the UK and the EU, tweeting:
‘My Administration looks forward to negotiating a large scale Trade Deal with the United Kingdom. The potential is unlimited!’
The US Dollar has gained on the Euro today despite the publication of the US continuing jobless claims figures for March, which increased at 1.776m against February’s 1.758m.
Today also saw the release of the US initial jobless claims which also increased to a disappointing 229k.
EUR/USD Exchange Rate Sinks as Tusk Appeals for UK Brexit Extension
Brexit developments are continuing to weigh heavily on the Euro today, with the European Council President Donald Tusk appealing to the EU today for a possible extension of the UK’s Brexit deadline.
Tusk tweeted today:
‘During my consultations ahead of EUCO, I will appeal to the EU27 to be open to a long extension if the UK finds it necessary to rethink its Brexit strategy and build consensus around it.’
Any indications that the UK could extend Article 50 could see an increased likelihood of a second referendum, and with expectations that voters’ decisions may have changed since the initial vote, this could see the Brexit process overruled, which would prove Euro-positive.
EUR/USD Forecast: Euro Could Rise on Positive Eurozone CPI Figures
Euro traders will be awaiting the publication of the Eurozone’s Consumer Price Index figures for February tomorrow, which are expected to improve.
Tomorrow will also see the publication of Italy’s industrial figures along with a slew of inflation data, and any signs of an improvement in Italy’s struggling economy could benefit the Euro.
USD investors, meanwhile, will be looking ahead to tomorrow’s publication of the US Michigan Consumer Sentiment Index for March, which is set to decrease at 95.3.
The EUR/USD exchange rate will likely remain sensitive to political developments into next week, with Brexit remaining in key focus as the UK decides which route it shall take.
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