EUR/USD – Euro subdued in thin holiday trade

EUR/USD has started the new trading week quietly. Currently, the pair is trading at 1.1195, down 0.08% on the day. There are no German or eurozone events. In the U.S., markets are closed for Memorial Day, and there are no U.S. indicators. With no data releases, traders can expect a quiet day for the pair. On Tuesday, Germany releases Ifo Business Climate, while the U.S. posts CB Consumer Confidence.

The votes have been tallied in the European parliamentary elections, as over 200 million voters went to the polls in 28 EU countries, including the U.K. The results were dramatic, as far-right parties across Europe made gains, at the expense of centrist parties. In France, Marine Le Pen’s National Rally party came in first, handing a stinging defeat to President Macron. In Germany, Chancellor Angela Merkel’s conservatives lost ground, and voters in the U.K sent a strong message to Labor and the Conservatives, as Nigel Farage’s Brexit party won the most seats. The ramifications are already being felt, as Greek Prime Minister Alexis Tsipras has called a general election after his Syriza party fared poorly in the EU elections. The euro has not shown much movement on Monday, but could face headwinds as investors digest the results.

German numbers were mixed last week. Manufacturing PMI pointed to contraction for a fifth straight month, with a reading of 44.3 in May. Ifo Business Climate slipped to 97.9, its lowest score since February 2010. However, GDP improved by 0.4% in Q1, compared to no growth in Q4 of 2018. The eurozone manufacturing PMI also showed contraction, with a reading of 47.7. There was better news from the services sector, as German and eurozone PMIs were above 50, pointing to expansion.

The U.S. ended the week on a disappointing note, as April durable goods orders were softer than expected. Durable goods orders slumped 2.1%, just below the estimate of -2.0%. This marked the sharpest decline since January 2018. The core reading slowed to 0.0%, down from 0.4% a month earlier.