EUR/USD is almost unchanged in the Thursday session. Currently, the pair is trading at 1.1276, up 0.02% on the day. On the release front, German Final CPI remained steady, with a gain of 0.4%. This matched the forecast. The U.S. will release producer price index reports. PPI is expected to rise to 0.3% and Core PPI is forecast to improve to 0.2%. Unemployment claims is projected to rise to 210 thousand.
The ECB is expected to hold interest rate levels and will release a policy statement. The U.S. releases key inflation data. CPI is expected to improve to 0.3% and Core CPI is projected to climb to 0.2%. As well, the FOMC releases the minutes of the March policy meeting. On Thursday, the focus will be on inflation. Germany posts CPI and the U.S. releases PPI. On Friday, the eurozone releases industrial production, while the U.S. posts UoM consumer sentiment and the semi-annual Treasury currency report.
There were no surprises from the ECB policy meeting, and the euro responded with limited movement. The bank held the minimum bid rate at 0.00%, where it has been pegged since 2016. Investors were more interested in Mario Draghi’s comments after the rate decision. Draghi acknowledged that eurozone economic data remains weak, particularly in the manufacturing sector. The economic outlook remains weak, with Draghi saying that “slower growth momentum is expected to extend into the current year”. At the same time, Draghi said that the likelihood of a recession remains low. On the inflation front, Draghi stated that interest rates will remain at current levels at least until the end of 2019 and possibly later.
The Federal Reserve was also in focus on Wednesday, with the release of the minutes from the March meeting. The Fed left the door open to rate hikes in 2019, provided that economic conditions improved. Some members said that they expected the economy to improve, while others said that rate movement could shift “in either direction based on incoming data and other developments”.
