- German consumer confidence rises
- EUR/USD pushes above 1.10
EUR/USD is trading at 1.1040, up 0.60% on the day
German consumer confidence brightens
German consumer confidence continued its upswing heading into May. The German GfK consumer sentiment index rose to -25.7, up from -29.3 in April and above the estimate of -27.5 points. Not exactly red-hot numbers, but the upswing has now extended over seven straight months, a clear trend that the German consumer is becoming more optimistic about economic conditions. As well, income expectations rose for a seventh straight time, the highest level since February 2022 and the main driver for the rise in consumer confidence.
German consumers were able to breathe a sigh of relief as the feared energy crunch this past winter never materialized. Energy prices remained relatively moderate and the government pitched in with subsidies that lowered energy bills for households. Still, consumer demand has been weak, dampened by the double-barreled jab of high inflation and rising interest rates. The German economy is not in great shape, with GDP expected to stagnate in 2023, and as the largest economy in the eurozone that certainly does not bode well for the rest of the bloc.
In the US, it’s the opposite story, as consumer confidence slowed to a nine-month low in April. The Conference Board consumer confidence index slipped to 101.3, down from the March reading of 104.0, which was also the estimate. The survey found that the level of consumers planning to buy major household appliances in the next since months fell to a 13-year low, and that could spell big trouble for the economy, as consumer spending is a key driver of growth. Consumers have been resilient in the face of high inflation and rising rates, but that could be changing as the Fed’s aggressive tightening percolates through the economy.
EUR/USD Technical
- EUR/USD is testing resistance at 1.1023. Above, there is resistance at 1.1056
- There is support at 1.0966, followed closely by at 1.0933
