EUR/USD has steadied on Monday, after posting considerable gains in the Friday session. Currently, the pair is trading at 1.1499, down 0.13% on the day. The sole event is the German Bundesbank monthly report. On Tuesday, Germany releases PPI and eurozone consumer confidence.
The euro ended the week with considerable gains, boosted by a strong eurozone current account and soft U.S housing numbers. Eurozone current account surplus climbed from EUR 21.3 billion to 23.9 billion, crushing the estimate of EUR 21.4 billion. This marked a 4-month high. In the U.S, Existing Home Sales slipped t0 5.15 million, down from 5.34 million a month earlier. This was the smallest lowest existing home sales level since November 2015. The increase in interest rates has led to higher mortgage rates, which has dampened home sales. U.S construction numbers were soft earlier in the week, as Building Permits and Housing Starts both missed their estimates.
Relations between the U.S and China are frosty, with the markets nervous that the trade war could worsen. The U.S Treasury Department released its semi-annual report on foreign exchange rates, and there was some relief in the markets as the report did not name China as a currency manipulator. Still, the report said that the U.S was “deeply disappointed’ with that China refuses to disclose the extent of its foreign currency intervention. The Chinese yuan has slipped some 9 percent since April, and U.S officials are concerned that China has deliberately weakened the currency in order to counter U.S tariffs on Chinese goods, and will continue to monitor China’s currency practices.
