EUR/USD Exchange Rate Rangebound, US Business Optimism Improves
The Euro US Dollar (EUR/USD) exchange rate held steady today, with the pairing currently trading around $ 1.092 after the NFIB Research Foundation’s US business optimism index for January beat expectations and edged higher from 102.7 to 104.3.
US Dollar (USD) investors are also remaining cautious ahead of testimony before the US Committee on Financial Services from Jerome Powell, the Chairman of the Federal Reserve, later on this afternoon.
We could see the US Dollar (USD) edge higher against the single currency, however, if Mr Powell is notably more optimistic about a recovery of America’s growth for 2020.
Robert Perli, an economist at Cornerstone Macro, was optimistic, commenting:
‘His message will probably be that, if rate cuts are coming, they would come solely in response to global disruptions associated with the virus. He will likely say clearly that the U.S. economy is inherently healthy.’
The US Dollar (USD) is also continuing to benefit from its safe-haven status today, as China’s coronavirus outbreak is leaving many investors concerned over the global economy with the world’s second-largest economy under strain from the unpredictable epidemic.
EUR/USD Exchange Rate Steady, Christine Lagarde Speech in Focus
The Euro (EUR) has remained relatively unmoved against the US Dollar (USD) today following yesterday’s downbeat Sentix investor confidence report for February, which showed a downturn from the previous month’s 7.6 to 5.2.
Sentix acknowledged China’s outbreak of the coronavirus as a contributory factor to the bloc’s declining morale, commenting:
‘The outbreak of the coronavirus and the subsequent drastic measures taken by the Chinese government to seal off the mainly affected Hubei province with the provincial capital Wuhan cast a shadow over the [global] economic outlook.’
Meanwhile, Euro investors are bracing for today’s speech by Christine Lagarde, the newly-appointed head of the European Central Bank (ECB). Any dovish comments about the bloc’s economy, however, would weigh on the EUR/USD exchange rate.
EUR/USD Outlook: Could the US Dollar Rise on Increasing Safe-Haven Demand?
Euro (EUR) investors will be looking ahead to tomorrow’s release of December’s Eurozone industrial production report, which is forecast to deteriorate from 0.2% to -1.6%. As a result, we could see the Euro slide against its peers as the economic outlook for the block continues to darken.
US Dollar (USD) traders, meanwhile, will be awaiting tomorrow’s second-round of Jerome Powell’s testimony. Any signs that the head of the Federal Reserve could change his tone to a more dovish outlook would hinder the ‘Greenback’s gains.
However, with rising concerns over the coronavirus epidemic, it is likely we’ll see the US Dollar continue to benefit from its safe-haven status.
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TAGS: American Dollar Forecasts Euro Forecasts