EUR/USD has posted slight losses in the Monday session. Currently, the pair is trading at 1.1387, down 0.15% on the day. On the release front, there are no eurozone indicators. In the U.S, there are no key events. On Tuesday, Germany releases Preliminary CPI and the euorozone publishes Preliminary Flash GDP. The U.S will release CB Consumer Confidence.
The U.S economy continues to purr like a smooth race engine, as Advance GDP for the third quarter jumped 3.5%, above the estimate of 3.3%. This was down from the sizzling Final GDP for Q2, which came in at 4.2%. The euro continues to struggle, as last week’s decline was one of the sharpest this year. With global stock markets spiraling lower, risk appetite has dampened as investors flock to the U.S dollar at the expense of the euro and other currencies. A rash of geopolitical hotspots has weighed on investor sentiment, including the spike in Italian debt, the Brexit impasse and the U.S-China trade war.
As expected, the ECB maintained its main refinancing rate at a flat 0.00% at its policy meeting on Thursday. ECB President Mario Draghi acknowledged that the turmoil in global markets has raised the risks to the eurozone economy, but reiterated that the ECB remained on track to wind up its asset-purchase program in December. With the euro and European stock markets heading lower this week, Draghi tried to put a positive face on recent developments. He discussed the eurozone’s “broad-based” economic growth and said he was confident that the Italian government would reach an agreement with the European Commission, which has rejected Italy’s budget since it raises the country’s deficit. However, Drahgi acknowledged that the eurozone economy has softened, and also noted the risks from the global trade war and the volatile political climate in Italy.
