The euro is flat on Friday, as EUR/USD trades in the low-1.13 range in the European session. On the release front, Eurozone releases were a disappointment. German Retail Sales posted a gain of 0.2%, while Eurozone CPI Estimate posted a sharp decline of 0.6%. In the US, today’s major events are Advance GDP and UoM Consumer Sentiment.
German Retail Sales posted a weak gain of 0.2%, marking a 3-month low. The estimate stood at 0.4%. Eurozone inflation remains anemic, as the CPI Estimate came in at -0.6%, its second straight decline. In Spain, CPI followed suit with a decline of -1.4%, although there was good news from GDP, which improved to 0.7% in Q4.
US key numbers were a mix on Thursday. This was underscored by Unemployment Claims, which plunged to 265 thousand, down from 307 thousand a week earlier. This marked the indicator’s lowest level since April 2000. The news was not as positive from Pending Home Sales, which declined 3.7%, its worst reading in a year.
The Federal Reserve reiterated in its policy statement on Wednesday that it would be ‘”patient'” regarding the timeline for a raise in interest rates, which have been close to zero since 2008. However, the Fed also noted that the US economy was expanding at a ‘”solid pace'” thanks to the robust labor market. This vote of confidence helped the dollar post sharp gains against the euro. The Fed is widely expected to raise rates sometime during the year, so the ‘”Fed rate watch'”is sure to continue as the markets look for clues as to when the Fed will make a move.
EUR/USD 1.1329 H: 1.1353 L: 1.1304
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