Exchange Rate in Eurozone
Eurozone - Exchange Rate (average of period)
Euro appreciates to strongest value since January 2015
High uncertainty in the United States coupled with strong economic momentum in the Eurozone led the euro to appreciate to its strongest value against the dollar in over two years in August. On 28 August, the euro traded at 1.20 USD per EUR, which represented a 1.8% appreciation from the same day of the previous month. The result represented a 6.0% gain from the same day last year, and the euro was up 13.3% year-to-date.
The euro’s gain is primarily due to events in the United States. A turbulent political situation has exerted pressure on the dollar; combined with expectations of fewer and smaller interest rate hikes by the Federal Reserve, it has caused the value of the dollar to plummet. Meanwhile, the Euro area’s economy has fired on all cylinders so far in 2017, enjoying a notable period of growth. However, the strong appreciation could take a bite out of export revenues in H2, as it weighs on competitiveness and undermine the gains in the recovery seen this year. Moreover, the appreciation could put downward pressure on inflation, complicating the ECB’s upcoming monetary policy decision. While the recovery has picked up steam, reducing the need for an ultra-accommodative monetary policy stance, inflation still remains far below the ECB’s target. Peter Vanden Houte, Chief Eurozone Economist at ING, explains their outlook for monetary policy, commenting:
“We […] expect that the ECB will step up its vocal intervention against the strengthening of the euro. One should remember that Draghi’s predecessor, Jean-Claude Trichet, several times tried to stop the euro’s appreciation by stating that brutal currency moves were most unwelcome. But even then, the euro exchange rate might end up being a bit stronger than previously thought, which leads us to believe that the first deposit rate hike might now only come in January 2019.”
FocusEconomics Consensus Forecast panelists see the euro trading at 1.14 USD per EUR at the end of 2017 and see it trading at 1.16 USD per EUR by the end of 2018.
Eurozone - Exchange Rate (aop) Data
|Exchange Rate (vs EUR, aop)||1.33||1.33||1.11||1.11||1.13|
5 years of economic forecasts for more than 30 economic indicators.
Eurozone Exchange Rate (aop) Chart
Source: Thomson Reuters.
|Exchange Rate||1.14||0.65 %||Jan 16|
|Stock Market||1,067||-0.52 %||Jan 16|
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January 17, 2019
According to complete data released by Eurostat on 17 January, harmonized inflation came in at 1.6% in December, matching the preliminary estimate and below November’s 1.9%.
January 9, 2019
According to data released by Eurostat, labor market conditions in the common currency bloc improved in November.
January 4, 2019
According to a preliminary release by Eurostat on 4 January, harmonized inflation dropped to 1.6% in December, down from 1.9% in November.
December 17, 2018
According to complete data released by Eurostat on 17 December, harmonized inflation came in at 1.9% in November, a notch less than the preliminary estimate and below October’s 2.2%.
December 14, 2018
Leading data suggests that the Euro area’s economy ended the year on a weak note.