In Forex, Euro exchange rate to dollar exchange rate pair is the world’s most traded currency pair and many traders prefer to deal in this particular currency trading pair based on latest exchange rate movements and forecast. When high volumes of EUR/USD pairs are traded it can have an impact on how the single currency performs against its other rivals.
Consider for example if the EUR/USD currency trading pair gains momentum then single currency might do well against currencies like British pound sterling, Kiwis, Australian dollar and so on. In past few years, this major pair has gone through unpredictable situation due to inception of global economic crisis moving from highs of 1.5975 to lows of 1.0485.
Euro Exchange Rate Versus Dollar
If we compare the trend of Euro exchange rate versus U.S dollar over past weeks then it is crystal clear that value of major currency pair has shifted downwards. US dollar remain under heavy pressure after the announcement made by Janet Yellen, Chair, Federal Reserve last week in which she stated that they are not expecting to change the interest rate until June.
Greenbacks remained weak after the consumer confidence index dropped to new a low of 89.7 even though it was anticipated by economist that this figure would raise to 92 from previous reading of 91. United States industrial production figures continued to be disappointment in the month March as industrial production declined by negative 0.6pc. However, it has been forecasted that decline rate will slow down to negative 0.1pc. As a result Euro exchange rate versus the dollar exchange rate advances further.
Jeroen Dijsselbloem, Finance Minster, Eurozone has said that IMF meeting conducted last week will not get anywhere on the Greek bailout and over the weekend this issue is not likely to get resolve. Although it is expected that meetings which will be held in Amsterdam this week could see more progress and get somewhere. Moreover, the complications on Greek bailout have lead to Euro exchange rate and US dollar exchange rate to slip.
At the moment, Eurozone creditors want a surplus Gross Domestic Product (GDP) of 3.5pc by 2018. On the other hand, IMF says GDP growth rate by 1.5pc sounds more doable. The fear of Greece leaving the Eurozone has put pressure on the Euro once again and if a deal is not struck between the Hellenic nation and Eurozone creditors then Greece could be forced to leave.
The official data released by China showed some positive results this year as the retail sales was seen to grow by 0.4pc to 10.5pc. Industrial production also went up from 1.4pc to 6.8pc as compared to the initial forecast of 5.9pc. Even though GDP declined by negative 0.1pc but it was already expected by the economists. Moreover, Foreign Direct Investment (FDI) was almost three times higher than the initial forecast and the figure rose from 1.8pc to 7.8pc. The official positive data released from China gave a small boost to US dollar. Furthermore, Federal Reserve can now divert its attention on developments in China to help control the direction US monetary policy.