EUR/USD is stable on Tuesday, following gains a day earlier. In the European session, the pair is trading in the high-1.35 range. On the release front, German ZEW Economic Sentiment continued to drop and fell short of the estimate. Eurozone ZEW Economic Sentiment improved in May but also fell short of the forecast. Over in the US, we'll get a look at two key releases - Building Permits and Core CPI.
German ZEW Economic Sentiment, a well-respected indicator, continues to lose ground throughout 2014. The index weakened to 29.8 points, well off the estimate of 35.2 points. This was the worst reading we've seen since November 2012. Eurozone ZEW Economic Sentiment improved in May, climbing to 58.4 points. However, this fell short of the estimate of 59.6. Despite the dismal German release, the euro is holding its own against the US dollar.
The ECB lowered interest rates last week in an attempt to shore up flagging inflation levels, but it's still too early to tell if this has achieved the desired effect. On Monday, Eurozone CPI, the primary gauge of consumer inflation, dipped to 0.5%, while Core CPI improved to 0.7%. Both figures matched their estimates, so the euro didn't react to these important releases. We'll get a look at German inflation numbers late in the week. If inflation indicators in the Eurozone don't show substantial improvement, the ECB will be under strong pressure to take stronger monetary measures at its July policy meeting.
After a poor performance last week, US releases started the week on a positive note, as Empire State Manufacturing Index climbed to 19.3 points, its best showing since February 2012. This easily surpassed the estimate of 15.2 points. The markets are keeping a close eye on Core CPI, the primary gauge of consumer inflation. The markets are expecting another weak reading, with an estimate of 0.2%.
EUR/USD 1.3560 H: 1.3587 L: 1.3553
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities.
Opinions are the authors — not necessarily OANDA’s, its officers or directors. OANDA’s Terms of Use and Privacy Policy apply. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.