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EUR likely to be bolstered by retail, confidence figures, US consumer credit to rise

business-articlesEUR likely to be bolstered by retail, confidence figures, US consumer credit to rise
  • Eurozone retail sales expected to have rallied last month
  • EUR forecast to strengthen following Eurozone business confidence data
  • US consumer credit to dip in November
Eurozone retail sales forecast to rebound in December

The euro is expected to advance later this morning as the Eurozone publishes its latest retail sales figures.

Economists forecast that the figures will show that sales growth rebounded from -1.1% to 1% last month thanks to increased activity over the Christmas period.

At the same time, year-on-year sales are expected to show that consumers were a little more willing to splurge on Christmas last year compared with 2016, with forecasts that annualised sales will have climbed from 0.4% to 2.2%.

However, given the impressive rebound in German retail sales figures last Friday, which saw monthly sales growth rocket from -0.9% to 4.4% against expectation of a rise to 2.5%, investors may be hopeful that this sharp recovery will be seen across the Eurozone.

Business confidence figures expected to support EUR

Another data release likely to influence the euro this morning is the latest Eurozone business confidence survey.

The confidence index is expected to continue its recent uptrend and have risen from 1.49 to 1.5 at the end of 2017.

Should the index rise in line with expectations, this will be the highest reading since 2007, suggesting that the stellar growth seen in the Eurozone last year has certainty bolstered optimism amongst business.

However, there are some suggestions that the recent political uncertainty in Germany could cause concerns for some firms, something which could lead to a slight dip in business sentiment and likely drag on the euro.

US consumer credit expected to slide

The Federal Reserve will publish the latest US consumer credit report later this morning, with economists forecasting that credit will have slipped from $20.52bn to $17.8bn in November.

The dip is likely due to credit beginning to normalize after American’s seeking to replace hurricane damaged vehicles led to a particularly strong October.

However despite this credit levels are still likely to remain well above the long-term average of $4.65bn, suggesting that consumer spending will have remained robust in the last quarter of 2018.

While high levels of debt are likely to prompt some worry amongst investors, with banks remaining confident that borrowers are keeping up with debt repayments thanks to record-low unemployment and recent economic growth, it should cause USD to strengthen.
Upcoming Data

Monday, 8 January, 2018
10:00               EUR Retail Sales
10:00               EUR Business Confidence
20:00               USD Consumer Credit
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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