Chinese growth data supports EUR/USD
|A strong Asian session initially supported euro buying yesterday. EUR/USD retreated from its intraday high around 1.1314 however. Reuters reported that "a significant minority" of ECB officials doubt the projected growth recovery in the second half of this year. The couple staged a comeback on a lack of enthusiasm within the ECB regarding deposit tiering. EUR/USD eventually did slip below 1.13 (1.1281) as US/German interest rate differentials widened in favour of the dollar, despite weak US industrial data. USD/JPY closed unchanged at 112.
China's growth data took centre stage during today's Asian session. 2019Q1 GDP growth slightly beat estimates and other high profile data equally showed resilience. EUR/USD jumped back above 1.13. The Aussie dollar advanced near 0.72. The Chinese yuan performs rather disappointingly, suggesting some investor fatigue. The kiwi dollar (0.67) slipped after soft (inflation) data before recovering on the Chinese data. The yen traded a similar pattern. USD/JPY changes hands close at 112.
Today's economic data flow basically ran dry after the Chinese batch this morning. The numbers at first sight have further eased investor growth concerns. But will the anedotical evidence in the Fed's beige book later today do so too? Speeches by Fed's Harker and Bullard are wildcards for trading. Meanwhile the earnings season gains traction. The next important point of reference are tomorrow's EMU PMI's.
Global economic sentiment has recently turned for the better. Chinese GDP data did not completely debunk that. Last week's price actions shows the euro is still net benefiter of such circumstances. The currency recaptured 1.13 but the situation remains fragile. We watch for Q1 earnings and EMU PMI's to further confirm the sentiment turnaround. We maintain the view that a EUR/USD break lower isn't evident given the Fed's wait-and-see bias unless EMU/US data come in surprisingly weak/strong. A break above 1.13 introduces resistance at 1.1448.
Yesterday's UK job report was strong. Nevertheless, sterling traded with a slight negative bias, testing the upper bound of the 0.85/0.865 range (EUR/GBP closed at 0.864). Brexit temporarily moved to the background as British MP's enjoy the Easter holidays. March CPI data might trigger some sterling volatility today. However, it won't change the BoE's assessment. In a broader perspective we stay cautious on sterling as long as Brexit and the political impasse drags on. We assume the EUR/GBP 0.85 support area to be solid.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.