EUR/USD Exchange Rate Steadies as Eurozone Core CPI Figures Hold Steady
The Euro US Dollar (EUR/USD) exchange rate steadied today and is currently trading around $1.1162 on the inter-bank market.
The Euro (EUR) managed to claw back some of its losses against the US Dollar (USD) following today’s publication of the Eurozone’s Core CPI figures for April, which held steady at 0.9%.
These were followed by the Eurozone’s encouraging Core CPI yearly figures, however, which rose above consensus at 1.3%.
Meanwhile the Eurozone’s year-on-year construction output figures for March rose above the expected 1.8% to 6.3%, providing some return of positive market sentiment in the single currency.
The US Dollar, however, has benefited from increasing hopes on the positive forecast for the flash US Michigan Consumer Sentiment Index for May, which is expected to increase to 97.5 from April’s 97.2.
EUR/USD Exchange Rate Rangebound as Italy-EU Fiscal Controversy Continues
In European political news, meanwhile, Italian Deputy Prime Minister Luigi Di Maio has caused controversy once again saying he is not worried about EU sanctions over possible violations of fiscal rules, adding that the EU leadership would likely change after the European elections.
Di Maio said:
‘After the vote, this Europe will not exist anymore.’
With the European elections due to take place next week, concerns are rising in the Eurozone that political uncertainty could delimit market confidence in the single currency.
The UK’s Brexit party is also becoming a concern ahead of the European Elections, with the party expected to win a majority over the Labour and Conservative parties.
USD/EUR Exchange Rate Steadies as China Hits Back and Cancels US Pork Imports
‘Greenback’ investors will be awaiting the speech by the Federal Reserve’s President of the Bank of New York, John Williams, today, and with any dovish indications on the direction of the US economy, this could begin to weigh on the USD/EUR exchange rate.
The on-going US-China war is continuing to concern USD investors, following China’s announcement that will cancel US pork imports.
Dennis Smith, a Commodity Broker with Archer Financial Services, commented:
‘It’s just disappointing that this trade war could drag on for months and that means more tariffs on pork. This should not be happening.’
EUR/USD Outlook: European Elections in Focus
Euro traders will be looking ahead to Monday next week, which will see the publication of the German PPI figures for March, which are expected to improve.
USD traders, meanwhile, will be awaiting Monday’s publication of the US Chicago Fed National Activity Index figures for April.
However, with the imminence of the European elections, many single currency investors will be keeping a close eye on political developments, and with any signs of a challenge to the EU – along with the UK’s Brexit – this could begin to weigh on the EUR/USD exchange rate.
