Poor U.S. results prevent Euro slump
Sterling rose 0.8% against the Euro yesterday to trade at its best level since Sunday’s first round of France’s presidential election. Its gains were largely due to broad weakness in the Euro, which fell across the board after European Central Bank (ECB) President Mario Draghi said policy makers did not discuss removing the bank’s monetary policy easing bias at this month’s meeting.
The Pound gained ground before Draghi’s press conference, due to a disappointment that a pickup in growth and inflation had not driven a broad change of stance among ECB rate-setters.
The Dollar edged up in overnight trade but was on track for a losing on the month against a basket of currencies. An increase in US durable goods orders came out slightly weaker than expected at 0.7% for March, which showed a decline of 0.2% against the expected growth.
The latest reading for jobless claims was also higher than expected at 257,000 from 243,000 the previous week, although the goods trade deficit for March was slightly lower than expected. The data offered no significant support to the Dollar, yet the US currency remained robust.
The Euro dipped against the Pound and the U.S. Dollar yesterday after ECB Chief Mario Draghi said policy makers did not discuss removing the bank’s easing bias on monetary policy. The Euro initially rose to session highs due to language in the ECB’s statement, which said the Eurozone’s recovery was increasingly solid and downside risks had diminished.
Other parts of the statement and rhetoric questioned the stress the barriers that the ECB still faces, leaving open the option of increasing the program which caused the single currency to be sold off across the board.
Data to Watch:
6:30am EUR FRA Gross Domestic Product (QoQ) (Q1), GDP (YoY) (Q1). 7:45am EUR FRA Consumer Price Index (EU norm) (YoY) (Apr). 9:30am GBP Gross Domestic Product (YoY) (Q1), GDP (QoQ) (Q1). 10:00am EUR Consumer Price Index – Core (YoY) (Apr), CPI (YoY) (Apr). 1:30pm USD Gross Domestic Product Price Index (Q1), GDP Annualised (Q1), Personal Consumption Expenditures Prices (QoQ) (Q1), Core Personal Consumption Expenditures (QoQ) (Q1). 2:45pm USD Chicago Purchasing Managers’ Index (Apr). 6:00pm USD Baker Hughes US Oil Rig Count.