As of this writing, EUR/USD is trading just above 1.1600 on Friday, meaning it is virtually flat on the daily chart and on track to end its three-week losing streak. The pair depreciated by 0.34% the previous day as sturdy US employment and industrial reports reinforced the view that the Federal Reserve (Fed) will leave interest rates unchanged in the coming months.
Economic data released Thursday by the U.S. Department of Labor showed that the number of unemployed workers initially fell, contrary to expectations, to the lowest level since November, easing some of the market’s concerns about the deterioration of the labor market situation.
At the same time, the publications of the New York Empire State Manufacturing Index and the Philadelphia Fed Manufacturing Survey showed results that significantly exceeded expectations, highlighting the good start of the year for the sector.
Data for the euro zone published on Friday confirmed that consumer inflation in Germany fell to the European Central Bank’s target of 2% y/y in December. In the US, attention will focus on December’s industrial production data and speeches by Fed vice-chairs Michelle Bowman and Philip Jefferson.
Price in euro today
The table below shows the current percentage change of the euro (EUR) against the main listed currencies. The euro was strongest against the US dollar.
| USD | EUR | GBP | JPY | BOOR | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.05% | -0.18% | -0.28% | -0.03% | -0.10% | -0.40% | -0.19% | |
| EUR | 0.05% | -0.13% | -0.24% | 0.02% | -0.04% | -0.34% | -0.15% | |
| GBP | 0.18% | 0.13% | -0.11% | 0.18% | 0.09% | -0.20% | -0.01% | |
| JPY | 0.28% | 0.24% | 0.11% | 0.28% | 0.20% | -0.10% | 0.10% | |
| BOOR | 0.03% | -0.02% | -0.18% | -0.28% | -0.08% | -0.38% | -0.17% | |
| AUD | 0.10% | 0.04% | -0.09% | -0.20% | 0.08% | -0.30% | -0.09% | |
| NZD | 0.40% | 0.34% | 0.20% | 0.10% | 0.38% | 0.30% | 0.21% | |
| CHF | 0.19% | 0.15% | 0.00% | -0.10% | 0.17% | 0.09% | -0.21% |
The heat map shows the percentage changes of the major currencies relative to each other. The base currency is selected from the left column and the quote currency from the top row. For example, if you select Euro from the left column and move along the horizontal line to US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).
Daily Digest Market Changes: US Dollar Remains Supported by Strong Data
- The U.S. Dollar Index (DXY) pares gains on Friday but keeps the broader bullish trend intact. The latest U.S. macroeconomic data reflect a stronger economy with persistently high inflation, which has prompted investors to reduce their assumptions about Fed easing in the near future.
- U.S. jobless claims fell to 198,000 in the week ending January 10. from 207 thousand in the previous week, against market expectations of an enhance to 215 thousand.
- New York State’s manufacturing index rebounded to 7.7 in January, after falling 3.7 in December. This month’s reading exceeded expectations of a more moderate improvement to 1, indicating significant strengthening in business conditions in the sector.
- Similarly, the Philadelphia Fed Manufacturing Survey rose to 12.6 in January from -8.8 the previous month, also beating expectations of -2. The number of modern orders and deliveries increased, the employment rate decreased, although it showed an overall improvement compared to previous months, while prices remained above long-term averages.
- In this context, hawkish comments from Fed policymakers provided additional support for the US dollar. Atlanta Fed President Raphael Bostic and Kansas Fed President Jeffrey Schmid reiterated the need to keep interest rates at tight levels due to persistently high inflation pressures.
- In the euro zone on Friday, the final German Harmonized Consumer Price Index confirmed that inflation had fallen to 0.2% in December and to 2.0% in the previous 12 months, after readings of -0.5 and 2.6% respectively in November. After the data was published, the euro rebounded from its lows.
Technical Analysis: EUR/USD Swings at Six-Week Lows with Support at 1.1590
The EUR/USD rate is at 1.1610, oscillating near the bottom of the descending channel from the delayed December highs. The moving average convergence divergence (MACD) is falling below the zero line on the 4-hour chart, weakening, and the relative strength index (RSI) on the same time frame is 36, highlighting the downtrend.
Immediate support is located at Thursday’s low around 1.1590 and the bottom of the mentioned channel, currently around 1.1585. The next target is the delayed November lows near 1.1560. On the other hand, the previous support at 1.1621 (January 12 lows) is keeping the bulls ahead of the channel top at 1.1670 for now.
(The technical analysis for this story was written with the facilitate of an AI tool.)
Frequently asked questions about the euro
The euro is the currency of the 20 European Union countries belonging to the euro zone. It is the second most widely traded currency in the world after the US dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with average daily turnover exceeding $2.2 trillion per day. EUR/USD is the most traded currency pair in the world, accounting for an estimated 30% discount on all trades, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the euro area. The ECB sets interest rates and manages monetary policy. The ECB’s primary task is to maintain price stability, which means controlling inflation or stimulating economic growth. Its basic tool is to raise or lower interest rates. Relatively high interest rates – or the expectation of higher interest rates – will usually benefit the euro and vice versa. The Governing Council of the ECB takes decisions on monetary policy at meetings held eight times a year. Decisions are made by the heads of the euro zone’s national banks and six lasting members, including ECB President Christine Lagarde.
Inflation data in the euro area, measured by the Harmonized Index of Consumer Prices (HICP), is an vital econometric indicator for the euro. If inflation rises more than expected, especially above the ECB’s target of 2%, this obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to interest rates will typically benefit the euro as they make the region more attractive as a place to park money for global investors.
The published data are used to assess the condition of the economy and may affect the euro. Indicators such as GDP, PMIs for industry and services, employment and consumer sentiment surveys may influence the direction of the single currency. A sturdy economy is good for the euro. Not only will it attract more foreign investment, but it may prompt the ECB to raise interest rates, which will directly strengthen the euro. Otherwise, if economic data is delicate, the euro will likely fall. The economic data for the four largest eurozone economies (Germany, France, Italy and Spain) is particularly vital as they constitute 75% of the eurozone economy.
The next vital data release for the euro is the trade balance. This indicator measures the difference between what a country earns from exports and what the country spends on imports over a given period. If a country produces a highly sought after export, its currency will only appreciate in value due to the additional demand generated by foreign buyers wanting to buy those goods. Therefore, a positive net trade balance strengthens the currency and vice versa in the case of a negative balance.
