EUR/USD has edged lower on Thursday, after posting four straight winning days. Currently, the pair is trading at 1.1307, down 0.19% on the day. On the release front, German CPI rebounded in February with a gain of 0.4%, after a decline of 0.5% a month earlier. In the U.S., the key event is unemployment claims, which is projected to edge up to 225 thousand. On Friday, the eurozone releases consumer inflation data. The U.S. will publish the Empire State Manufacturing Index and UoM Consumer Sentiment.

European inflation indicators are in market focus on Thursday and Friday. German CPI improved to 0.4%, but fell shy of the forecast of 0.5%. On Friday, the eurozone releases CPI, with an estimate of 1.0%. With inflation levels running well below the ECB target of around 2%, the ECB can afford to take hold interest rate levels at a flat 0.0%. At a time when Germany and the rest of the eurozone are mired in an economic slowdown, the bank will have little appetite for raising rates. In last week’s rate statement, the ECB set guidance at maintaining rates until 2020, and this dovish stance soured investors on the euro, sending the currrency sharply lower.

The eurozone manufacturing sector has struggled, but there was some positive news on Wednesday, as the reading of 1.4% was the strongest gain since August 2017. Germany, the largest economy in the eurozone, has been posting weak manufacturing data. Industrial production fell 0.8% in January, missing expectations. The indicator managed only two gains in the second half of 2018 and has started 2019 with a decline. Last week, factory orders plunged 2.6%, marking a third successive decline. The U.S-China trade war has dampened global growth, which has reduced the demand for German exports and weighed heavily on manufacturing activity.

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