This is the current EUR-USD mid-market exchange rate. The Total Cost of buying foreign currency in the above table is calculated as the sum of all fees and the exchange rate margin, which is the difference between the provider's exchange rate and the mid-market EUR-USD exchange rate.
Whenever you are researching a particular exchange rate you are actually interested in two currencies as the value of a currency must always be quoted relative to a second currency.
So it follows that if you are determining the best time to transact, in this case the EUR vs USD, you should pay attention to both Euro and United States Dollar news and forecasts.
Between November and February, the euro was remarkably stable relative to the US dollar, against which it traded for the most part between $1.125 and $1.155. In the days leading up to this report, in March, the euro broke downwards to a 21-month low of $1.118.
Further to Brexit uncertainty, euro weakness followed March’s meeting of the ECB, at which the central bank said it will not raise interest rates until 2020 at the earliest as part of an effort to lift the eurozone economy out of this “period of continued weakness.”
ING analysts wrote in March that they expect the low-yielding euro to continue to depreciate against the dollar over the coming months. Danske Bank predicted a euro dip towards $1.1 before a rally over 3-6 months back into a $1.12-1.16 range.
The US dollar had been falling steadily in the lead-up to the March-20 Fed meeting, and those that were selling the currency amid speculation of a dovish surprise were entirely vindicated after the central bank ditched its December projection for two 2019 interest rate hikes and said it now sees rates unchanged until 2020.
The extent of the Fed’s dovish turn meant that the dollar suffered a rapid and significant correction. The euro leapt on the new projections to a 6-week high against the dollar of $1.145 and other major and emerging market currencies followed suit.
The Fed’s reassessment of future monetary policy reflects concerns over domestic and global economic growth, as well as inflation and risks originating overseas, likely including Brexit.
Earlier this year, ING said the dollar would soon “embark on a gradual long-term bearish trend.”
CIBC said: “A slowdown in the economy is likely to weigh on USD particularly in the second half of this year.”
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