Crude Oil Insights Crude Price Outlook, Uncategorized Exchange Rate Update. Euro-USD, USD-JPY Fall

Exchange Rate Update. Euro-USD, USD-JPY Fall

The US Dollar declined against its major currencies, as economic news pointed out towards a weak economic growth in the US economy. Also, the Euro declined on rising concerns over Greece’s ability to come out of its economic crisis. The EURO-USD exchange rate fell by 0.2008 percent to 1.4290, while the USD-JPY exchange rate fell by 0.0019 percent to 80.7970.

The Dollar Index, which measures the relative strength of the US Dollar against six other trading partners, including the pound, euro and yen, declined by 0.9 percent to 74.758. US GDP grew by 1.8 percent per annum in the first quarter of this year, lower than the expected growth rate of 2.2 percent per annum. Consumer spending increased by 0.4 percent in April, again lower than the investors’ predicted growth rate of 0.5 percent. Home sales and durable goods orders fell in April, while US employers added only 185,000 new jobs in May, the lowest amount since the beginning of this year. These economic news are pointing towards a stagnating US economy. With no signs of the economy picking up pace, the US Federal Reserve is expected to stick with maintaining interest rates between 0 and 0.25 percent at least for the rest of this year. Thus, the Greenback is expected to remain depreciated against its major trading currencies.

The Euro declined as the International Monetary Fund claimed that it may not release the next batch of bailout money due to Greece next month unless the country’s debt crisis improves. Greece is increasingly appearing to eventually restructure its debt and technically default, which will plunge the Euro’s value. Concerns about Greece is moving investors towards the Swiss Franc as a safer alternate, thereby depreciating the Euro.

 

Author: Usman