EUR Steady as USD Is Lowest in Months

Flat Euro Vs. Low US Dollar

Euro was flat, but its steadiness is considered a good sign. Better than expected manufacturing data is the main factor that influenced steady exchange rate of the European common currency. On Friday EUR/USD was at 1.1106 dollars. The US Dollar fell down not only against the euro but also other currencies. The index measuring its exchange rate against the basket of six currencies fell down to 97.335, a one-month low.

Tense China-US Relations

The not-so-good exchange rate of USD, according to experts, is the result of tense relations on the line between US and China. Even though US President Donald Trump remains positive on trade talks, and believes they are “moving right along” and it remains to be seen if tariffs will be increased as scheduled on Dec. 15, markets are not so optimistic. Investors seem to be worried with lack of such enthusiasm, as showed by Trump, from Chinese side. Chinese representative stick to their position that some of US tariffs need to be withdrawn if a deal ending the 17-month trade war is to be struck. Meanwhile Washington has not given any signs so far that it plans to scratch some tariffs.

Weak US Economic Data

Other news being a burden on USD exchange rate were weak private payroll numbers, slowdown in manufacturing activity sector and soft services branch – all being published this week. Trade deficit was reported at its lowest level in almost one and half year, as in October it was at 47.2 billion dollars.  At this moment investors are anxiously awaiting non-farm payrolls data. Early polls from Reuters show a forecast of 180,000 new jobs added in November. If data misses this mark, the Federal Reserve might consider its policy on the committee meeting on next Tuesday and Wednesday. On the last meeting the FED said it was putting on hold cutting rates as it has already done it three times this year. But this might change if the US economic data keeps on being underwhelming. Experts claim markets are very fragile at this moment.

USD is on Downfall Trend

The US Dollar has continued its downfall trend from Thursday as then it went down for a fifth session in a row. On Thursday afternoon the dollar index was down by 0.2% to 97.43654, meanwhile EUR/USD rose by 0.2% to 1.1102 dollars and the dollar dropped against the yen by 0.1% to 108.76 yen.

Pound’s Best Week In A While

British Pound is a having a roll as it is set for the best week since mid-October. Even though on Friday it fell down by 0.2% in the exchange rate against the dollar to 1.3138 dollar and against the euro to 84.58 pence, it was still doing very good. During the week it traded as high as 84.32 pence in the exchange rate against the euro. The GBP situation is especially surprising considering recent ongoing turmoil with Brexit and approaching general elections. Polls suggest that current prime minister Boris Johnson’s Conservative Party will win on Dec. 12.