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15/05/24
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EUR Flat After Mixed Eurozone Data
On Wednesday the euro drifted, and EUR/USD traded at about 1.0825, down 0.04% in the European session.
In the first quarter, the eurozone economy rebounded. GDP was 0.3% higher q/q, up from -0.1% in the fourth quarter. GDP grew 0.4% annually, up from 0.1% in the fourth quarter.
In March, industrial production was 0.6% higher m/m, after February’s revised gain of 1% and slightly higher than the market estimate of 0.6%. Industrial production declined by 1% annually, after February’s revised -6.3% and higher than the market estimate of -1.2%.
Recent releases indicate the eurozone economy is improving, and is experiencing stronger demand. China’s economic improvement has also increased the demand for exports from the eurozone.
The focus is on the US CPI report due to be released today, which could influence the US dollar. It is expected headline CPI will in April drop to 3.4% y/y, down from March’s 3.5%.
Headline CPI is expected to stay unchanged at 0.4% monthly. Core CPI, which is a better gauge of inflation trends, will likely ease to 3.6% from 3.8% y/y, and monthly to 0.3% from 0.4%.
On Tuesday Federal Chair Powell said inflation was dropping slower than expected and the Fed would stay patient and allow restrictive policy to do its work.
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