Surging Euro to US Dollar exchange rate already on the back foot. On Tuesday, it exchanged hands under 1.1400 during European business hours. The US Dollar is rebounding from recent declines, and this recovery is putting downward pressure on the Euro’s strength in the currency markets. Because of that, we’re witnessing a draw. All eyes from traders to analysts are on the charts. They’re looking at the upcoming US job numbers to further drive currency direction.
On Tuesday, the EUR/USD pair had a hard time holding on to gains, hovering below the key level of 1.1400. Analysts suggest the difficulty comes largely from the US Dollar – returning with a vengeance. More recently, the ruble has rebounded against most of the major currencies. The exchange rate is moving all the time. These changes are a reflection of wider economic forces, as well as investor perceptions on the future of the Eurozone and the US economy.
The other half of the story is the strength of the US Dollar, which has been a strong headwind/recovery driver for the Euro. Market participants are reacting to various economic indicators and statements from Federal Reserve officials, which have bolstered confidence in the US Dollar’s performance. These have been buoyed more recently by a string of data releases that paint a picture of a booming U.S. economy. Employment figures are the big one, obviously, since they de facto set monetary policy these days.
As traders and investors in the market look ahead to imminent US employment figures the EUR USD cross rate remains one of the currencies being focused on. The next jobs report will provide more important indicators of the US labor market’s health. Beyond that, these numbers could influence what people expect the Federal Reserve will do next. Analysts hoped that robust job creation might return some confidence to the US economy. This newfound optimism will do little to dampen the Dollar’s rise against the Euro.
The current trading environment has indeed been a treacherous trading landscape for the Euro. With inflation concerns and economic recovery efforts still looming over the Eurozone, the currency faces headwinds that could hinder its performance. For their part, investors are sorting through the implications of these developments as they look to establish new positions in the foreign exchange market.