EUR/USD has edged higher in the Monday session. Currently, the pair is trading at 1.1362, up 0.25% on the day. It’s a very quiet start to the week, with no eurozone or German events. The are no major indicators in the U.S., so traders can expect limited movement from the pair. On Tuesday, Germany releases GfK Consumer Climate and the U.S. posts CB Consumer Confidence. As well, Federal Reserve Chair Jerome Powell testifies before the Senate Banking Committee.
German and eurozone indicators were sluggish last week, raising concerns that after a slowdown in the fourth quarter, Q1 will also be a soft quarter. Last week’s numbers were weak, but the euro still managed to post a winning week against the greenback. On Friday, Germany’s fourth-quarter GDP showed no change, after a contraction of 0.2% in the third quarter. The Ifo Business Climate survey slowed for a sixth successive month, indicating concern in the business sector about the country’s economic outlook. Manufacturing and inflation data also disappointed. The manufacturing PMI contracted for a second straight month, while German CPI declined in January for the first time in a year.
In the eurozone, Flash Manufacturing PMI fell for a seventh successive month and came in at 49.7 fo February, below the 50-line which separates contraction from expansion. It marked the first decline since June 2013. Final Core CPI, which was above 2.0% just a few months ago, fell to 1.4% in January. If German and eurozone data continues to point to a slowdown, investors could sour on the euro.
