EUR/USD has edged lower on Thursday, as the pair trades in the mid-1.36 range in the European session. On the release front, French and Italian Industrial Production both posted sharp declines. Today's highlight in the US is Unemployment Claims. Little change is expected from the previous release.
The Federal Reserve minutes did not shed much light on when the Fed plans to raise interest rates, but policymakers did agree to wind up the QE scheme by October. The asset purchase program flooded the economy with over $2 trillion, and the Fed has been steadily reducing the program since last December. Winding down QE will require several more tapers by the Fed, but that shouldn't pose a problem, given the solid employment data the economy has been churning out. EUR/USD did not show much response to the low-key minutes, with the euro posting slight gains on Wednesday.
Eurozone growth continues to stumble, and there was no relief from Thursday's manufacturing numbers. Italian Industrial Production came in at -1.2%, compared to the estimate of +0.6%. This was the worst showing since October 2012. French Industrial Production looked even worse, posting a decline of 1.7%. The markets had expected a respectable gain of 0.5%.
The week started with some positive news out of Germany, after a rash of weak data from the Eurozone's largest economy. Trade Balance improved last month, posting a surplus of EUR 18 billion, the highest reading since last October. This easily surpassed the estimate of EUR 15.7 billion. German retail sales, employment and manufacturing data softened in May, raising concerns that a weakening German economy could dash hopes of growth in the Eurozone and hurt the euro.
EUR/USD 1.3625 H: 1.3651 L: 1.3620
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