EUR/USD has declined for a third straight day on Wednesday. Currently, the pair is trading at 1.1142, down 0.10% on the day. German markets are closed for Ascension Day, and there are no eurozone or German events. It’s a busy day in the U.S., highlighted by second estimate GDP, with an estimate of 3.1%. Unemployment claims is expected to rise to 216 thousand. On Friday, Germany and the U.S. both release inflation and consumer spending data.
The slowdown which has gripped the eurozone has also dampened growth in Germany, but the labor market has performed well and remained a bright spot. However, there was negative news in April, as unemployment rolls ballooned by 60 thousand in May, surprising the markets. The indicator has recorded consecutive declines for almost two years, and the estimate stood at -8 thousand. The unemployment rate edged up to 5.0% in May, up from 4.9% in April. The Federal Labor Agency said that the weak numbers indicate “a weakening economy on unemployment”. Trade tensions have hurt the German manufacturing and export sectors, but a tight labor market has boosted consumer spending, a key driver of economic growth.
It’s report card day for the U.S. economy, which releases Preliminary GDP. This second estimate of Q1 growth is expected to be revised downwards to 3.1%. This reading was just below the initial release of 3.2%, which easily surpassed the forecast of 2.2%. If the second estimate follows suit and beat expectations, the euro could head lower and flirt with the 1.11 level.
