Euro exchange rate today: No data to latch onto, but EUR looking prone to yet further under-performance

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Published on Thursday, 16 August 2012 08:55

Written by Sam Coventry

International Money Transfers at our sister site

"EUR/USD fell from a London high of 1.2343 to a NY low of 1.2264 in the day’s underperformance. Most of this came in a sharp move in London which didn’t appear to be linked to specific news" - Westpac Institutional Bank.

The euro (Currency:EUR) is holding ground north of 1.2242 against the dollar this morning - this level is key, as a fall below here would open a move towards the next level of support at 1.2134.

The euro dollar exchange rate is currently 0.14 pct down on a day-by-day basis, at 9:40 AM in London the currency pair is at 1.2275.


The euro pound exchange rate is 0.19 pct lower at 0.7821. UBS advise they are bearish on this pair: "The directional risk is to the downside. Key support area is at 0.7791/55. Resistance is at 0.7896."

"EUR/USD fell from a London high of 1.2343 to a NY low of 1.2264 in the day’s underperformance. Most of this came in a sharp move in London which didn’t appear to be linked to specific news. In the background was a story seen in Asia claiming Greece is seeking a two year extension to its deficit deadline which implies an additional funding need of EUR20bn," observe the team at Westpac Instiutional Bank, summing up the pressures the euro has been under over the past 24 hours.

There is very little by way of data for traders to latch on to this morning. There are some employment numbers out of the Netherlands however.

Dutch unemployment edged up to 6.5 pct in July from 6.3 pct the previous month, with the number of registered unemployed climbing above 500,000 for the first time since 1996.

Contrast this to the UK where unemployment, and jobless claims are falling. Yesterday it was reported the rate if unemployment had fallen to 8 pct.

The big news in Asia concerned an increasingly despondent China which is fretting about the impact the Eurozone crisis is having on Chinese exports.

The Chinese Commerce Ministry reported overnight that foreign investment into the country has fallen steadily this year.

Commerce Ministry spokesman Shen Danyang told a news conference that Europe was to blame:

"Right now, the sharp drop of exports to EU countries is the biggest important factor weighing on China's export growth...

"With the European debt crisis spreading and the global economy recovering at a slower than expected pace, we expect China's trade situation in the second half will become more severe and we are facing more pressure to meet the annual target for trade growth."