EUR/USD has posted slight losses on Tuesday. Currently, the pair is trading at 1.1148, down 0.16% on the day. On the release front, there are no major events for a second successive day. The eurozone releases consumer confidence and the U.S. posts existing home sales.
Voters in all 28 members of the European Union will head to the polls for a 4-day election, beginning on Thursday, to elect members to the European Parliament. Election turnout has been on the decline, with only 43% of eligible voters casting a vote in 2014. Key issues included the economic slowdown, the migrant crisis and the rise in Euroskpeticism. Euro-skeptics increased their representation in parliament from 12% to 25% in the last election, and with the dramatic increase in strength of populist parties, this trend could well continue. A strong showing by parties with an anti-EU agenda could weaken the euro. As well, the outcome of the vote could have an impact on the choice of the new head of the ECB, as Mario Draghi steps down in October, after an eight-year term.
The eurozone remains mired in a slowdown, and the German locomotive has also lost a step. Still, there was positive news in Germany and the eurozone last week, as GDP and inflation headed upwards. German Preliminary GDP improved to 0.4% in the first quarter, after a flat zero reading in Q4 of 2018. In the eurozone, Flash GDP also climbed to 0.4% in the first quarter, up from 0.2% in Q4. On the inflation front, inflation indicators impressed, with sharp gains in April. Final CPI climbed 1.7%, matching the forecast. This was up sharply from 0.8% in March. Final Core CPI rose 1.3%, edging above the estimate of 1.2%. This marked the strongest gain since March 2013. The ECB recently stated that it had no plans to raise interest rates prior to the spring of 2020, but if GDP and inflation numbers continue to improve, the ECB could raise rates earlier than this timeline.