EUR/USD has paused on Friday, after gaining ground on Thursday. Currently, the pair is trading at 1.1193, up 0.10% on the day. There are no German or eurozone events on the schedule. Today’s highlight is U.S. durable goods orders, with the markets braced for soft numbers. Durable goods orders is expected to decline 2.0% in April, after a strong gain of 2.7% in March. The core reading is expected to slow to 0.1%, down from 0.4% in the previous release. It’s Day 2 of the EU election, with results to be published on Sunday night, after all EU members have voted.
It’s been a quiet month of May for EUR/USD. The currency posted a modest gain of 0.28% on Thursday, the strongest move in either direction this month. Friday could be a quiet day, unless durable goods reports yield unexpected results. The euro managed to scratch gains despite weak German numbers. Manufacturing PMI dropped to 44.3 in April, marking a fifth straight contraction. Services PMIs continue to point to expansion, but the April score fell to 55.0, down from 55.6 a month earlier. There is also concern about business confidence, as Ifo Business Climate slowed to 97.9, shy of the estimate of 99.2. This was the weakest score since January 2010. Germany and the eurozone are gripped in a slowdown, and this has dampened business confidence.
The Federal Reserve continues to preach patience, as the minutes of the May meeting indicated that the Fed has no plans to change interest rates anytime soon. Although Fed members sounded more optimistic about economic growth, they remain committed to maintaining current rate levels, given that inflation remains low. Despite the Fed message, the markets expect at least one rate cut in 2019. The CME Group has priced in a 36% likelihood of a 25-point basis cut at the September meeting. The possibility of lower U.S. rates makes the greenback less attractive to investors and could boost the euro at the expense of the U.S. dollar.
EUR/USD Fundamentals
Friday (May 24)
-
Day 2 – European Parliamentary Elections
-
8:30 US Core Durable Goods Orders. Estimate 0.1%
-
8:30 US Durable Goods Orders. Estimate -2.0%
-
9:00 Belgian NBB Business Climate. Estimate -2.3
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 faces a minor resistance near at 1.0750
EUR/USD quickly left behind Wednesday’s small downtick and resumed its uptrend north of 1.0700 the figure, always on the back of the persistent sell-off in the US Dollar ahead of key PCE data on Friday.
GBP/USD returns to 1.2500 area in volatile session
GBP/USD reversed its direction and recovered to 1.2500 after falling to the 1.2450 area earlier in the day. Although markets remain risk-averse, the US Dollar struggles to find demand following the disappointing GDP data.
Gold holds around $2,330 after dismal US data
Gold fell below $2,320 in the early American session as US yields shot higher after the data showed a significant increase in the US GDP price deflator in Q1. With safe-haven flows dominating the markets, however, XAU/USD reversed its direction and rose above $2,340.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.