The euro is unchanged on Thursday, as EUR/USD continues to trade just shy of the 1.34 level in the European session. It's been a July to forget for the struggling euro, which has coughed up about 300 points to the surging US dollar. On the release front, Eurozone indicators were mixed. German Retail Sales and Unemployment Change beat their estimates, and French Consumer Spending posted another strong gain. Eurozone CPI and Unemployment Rate met expectations. In the US, today's highlight is Unemployment Claims. The markets are braced for a rise in claims, which would likely have a negative impact on the dollar.
Eurozone CPI, one of most important indicators, edged lower to 0.4%. Although this was close to the estimate of 0.5%, this figure was the lowest in almost five years, and raises concerns of deflation. There was better news from the Eurozone Unemployment Rate, which dipped to 11.4%, its lowest level since September 2012. German data was positive, led by Retail Sales which jumped 1.3%, beating the estimate of 1.1%. German Unemployment Change posted a decline of 12,000, easily surpassing the estimate of a drop of 5,000.
In the US, GDP soared in the second quarter, expanding at an annual rate of 4.0%. This easily beat the estimate of 3.1%. The boost in economic activity was boosted by strong consumer confidence and business activity in Q2. Meanwhile, ADP Nonfarm Payrolls was unable to keep pace. The key employment indicator dropped to 218 thousand, compared to 284 thousand a month earlier. This was well off the estimate of 234 thousand. If the official Nonfarm Payrolls follows suit with a weak reading on Friday, the US dollar could give up its recent gains.
CB Consumer Confidence was outstanding on Tuesday, pointing to a sharp increase in June. The key indicator jumped to 90.9 points, crushing the estimate of 85.5 points. This was the indicator's highest level since September 2007. Consumer confidence is closely tracked by analysts since a confident consumer is likely to increase consumption, which is critical for economic growth.
EUR/USD 1.3398 H: 1.3400 L: 1.3385
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