EUR/USD – Listless as German Confidence Data Mixed

EUR/USD is almost unchanged on Friday, as the pair's lack of movement continues. In the European session, the pair is trading in the mid-1.34 range. In economic news, German Ifo Business Climate, slipped to a nine-month low. German Consumer Climate looked very sharp, rising to 9.0 points. In the US, today's highlight is Core Durable Goods Orders. The markets are expecting a healthy gain after a decline in the May release. On Thursday, US Unemployment Claims sparkled but New Home Sales were well short of expectations.

German indicators measuring confidence in the economy sent mixed signals on Friday. Ifo Business Climate, a key indicator, dipped to 108.0 points, its lowest since September. At the same time, Consumer Climate continued its upward trend, hitting 9.0 points, just above the estimate of 8.9 points. German data can have a major impact on the euro, as the country boasts the largest economy in the Eurozone. If the markets show concern about the weak business climate figure, we could see the euro under pressure during the day.

In one of the first signs that the ECB's recent rate cuts may be bearing fruit, Eurozone PMIs posted encouraging numbers on Thursday. German Services and Manufacturing PMIs improved in June and beat their estimates. Services PMI was particularly impressive, hitting a three-year high, at 56.6 points. In the Eurozone, Services PMI easily beat the estimate, while Manufacturing PMI met expectations. French data, however, failed to keep pace with its European counterparts. Manufacturing PMI came in below the 50-point level, the mark that indicates expansion, for a second straight month, indicating contraction in the manufacturing sector. Services PMI pushed above 50 for the first time since March.

In the US, Unemployment Claims tumbled, as the key indicator fell to 298 thousand, its lowest level since February 2008. This surprised the markets, which had expected a reading of 301 thousand. The strong release continues a string of solid employment data, and the dollar could get a boost from the good news. As well, good news on the employment front is bound to increase speculation about a rate increase by the Federal Reserve.

US housing data was dismal on Thursday, as New Home Sales slumped to a three-month low. The key indicator fell to 406 thousand, compared to 504 thousand in the previous release. The markets were way off in their forecast, with an estimate of 485 thousand. There was much better news earlier in the week, as Existing Home Sales jumped to 5.04 million, surpassing the estimate of 4.94 million. This was the best showing we've seen since October.

EUR/USD 1.3466 H: 1.3476 L: 1.3461