EUR/USD has posted slight losses in the Thursday session. Currently, the pair is trading at 1.0640. On the release front, German Final CPI dropped to 0.2%, matching the forecast. French Final CPI took the opposite direction, improving to 0.6%, matching the forecast. In the US, there are a host of key indicators, all of which are expected to weaken. PPI is expected to dip to 0.0%, unemployment claims are forecast to rise to 242 thousand, while UoM Consumer Sentiment is expected to soften to 97.1 points. On Friday, the US releases consumer inflation and spending data.
German data has been a mixed bag this week. The ZEW Economic Sentiment report sparked with a reading of 19.5, crushing the estimate of 13.2. This marked the strongest gain since August 2015, pointing to strong optimism among institutional investors and analysts. However, inflation levels have softened in March. The Wholesale Price Index dropped to a flat 0.0%, compared to 0.5% a month earlier. This was well short of the forecast of 0.4%. The downward trend continued with Final CPI, which dropped to 0.2%, down from 0.6% in February. Eurozone CPI made a big splash in February, when it hit the ECB’s target of 2.0%, and raising speculation that the ECB might need to respond by tightening monetary policy. However, the indicator softened in March to 1.5%, short of the forecast of 1.8%. The softer March inflation numbers have certainly eased the pressure on the ECB, which is not scheduled to reduce its asset-purchase program until December.
Earlier this week, Federal Reserve Chair Janet Yellen said that with the economy close to full employment and 2 percent inflation, Fed policymakers were looking to reduce the support that the central bank was providing the economy. The minutes of the March meeting indicated that the Fed plans to trim the $4.5 trillion balance sheet, which has ballooned as a result of the huge asset-purchase program which started in response to the financial crisis in 2008. Yellen emphasized that the Fed’s policy stance is neutral, as interest rate increases will be gradual, given that the economy is growing at a moderate pace. The Fed is widely expected to raise rates twice more in 2017, with the next rate expected in June. At the same time, some Fed policymakers are in favor of three more rate hikes, which would bring the total this year to four moves.
Thursday (April 13)
- 2:00 German Final CPI. Estimate 0.2%. Actual 0.2%
- 2:45 French Final CPI. Estimate 0.6%. Actual 0.6%
- 8:30 US PPI. Estimate 0.0%
- 8:30 US Unemployment Claims. Estimate 242K
- 8:30 US Core PPI. Estimate 0.2%
- 10:00 US Preliminary UoM Consumer Sentiment. Estimate 97.1
- 10:00 US Preliminary UoM Inflation Expectations
- 10:30 US Natural Gas Storage. Estimate 5B
Friday (April 14)
- 8:30 US CPI. Estimate 0.0%
- 8:30 US Core CPI. Estimate 0.2%
- 8:30 US Core Retail Sales. Estimate 0.2%
- 8:30 US Retail Sales. Estimate 0.1%
*All release times are EST
*Key events are in bold
EUR/USD for Thursday, April 13, 2017
EUR/USD April 13 at 5:35 EST
Open: 1.0670 High: 1.0678 Low: 1.0638 Close: 1.0640
EUR/USD was flat in the Asian session and has posted slight losses in European trade
- 1.0616 is a weak support level
- 1.0708 is the next resistance line
Further levels in both directions:
- Below: 1.0616, 1.0506, 1.0340 and 1.0214
- Above: 11.0708, 1.0873 and 1.0985
- Current range: 1.0616 to 1.0708
OANDA’s Open Positions Ratio
EUR/USD ratio is showing slight gains in short positions. Currently, long positions have a majority (60%), indicative of trader bias towards EUR/USD breaking out and moving upwards.