EUR/USD has posted slight gains in the Friday session. Currently, the pair is trading at 1.1524, up 0.21% on the day. On the release front, there are no major eurozone indicators. Italian industrial production declined by 1.6%, well short of the estimate of -0.3%. Investors are bracing for weak inflation numbers out of the United States. CPI is expected to drop to -0.1%, while Core CPI is forecast to remain steady at 0.1%
Manufacturing sectors across the eurozone continue to struggle. Industrial production in Italy fell by 1.6% in November and in France the drop was 1.3%. The biggest worry is over Germany, where industrial production has slipped for three straight month. With the three largest economies in the eurozone in trouble, conditions may not warrant any rate increases in the foreseeable future. The ECB winded up its stimulus program last month, and had expressed plans to raise rates later this year.
Investor optimism is higher this week, as hopes are high that trade tensions between the U.S. and China could ease. The world’s two largest economies have been engaged in a nasty tariff spat, which has rocked the markets in recent weeks and threatens to put a chill on global growth. Chinese and U.S. officials met in China this week and the talks reportedly produced “minor progress”, raising hopes that the sides will reach an agreement and ease global trade tensions. The stakes are high, as President Trump has threatened to impose higher tariffs on $250 billion worth of Chinese products if there is no deal by March 1.