The Euro consolidated gains against the US Dollar during North American trading as US growth figures fell short of forecasts and added to the case for the Federal Reserve keeping fiscal policy accommodative.
During the European session the Euro fluctuated following the publication of a mixed bag of data, including a disappointing retail sales report for Germany.
However, with inflation figures for the Eurozone showing an increase in consumer prices the EUR/USD pairing advanced.
The Euro went on to edge higher against its US counterpart as figures compiled by the Commerce Department showed that the US economy all but stagnated in the first three months of the year.
Annualised growth in the first quarter climbed by just 0.1 per cent.
Economists had envisaged growth of 1.2 per cent.
In the final quarter of 2013 the US economy expanded by 2.6 per cent, but bad weather was largely attributed to the Q1 drop off.
In the opinion of economist Samuel Coffin; ‘So much of this is conditioned by that anomalous drop in exports and inventories and by the weather effect, and if anything one expects more of a rebound in the second quarter. I think [the Federal Reserve is] still tapering. I think they’ll blame this on the weather.’
Although some industry experts believe that the Federal Open Market Committee won’t take this data into account when making its policy decision later today, the Euro held gains against the US Dollar.
That being said, ‘Greenback’ losses were limited as separate UK data showed that in April companies added more workers than they have in the past five months.
The ADP employment figure showed a 220,000 gain this month following a positively revised 209,000 gain in March. This bodes well for Friday’s highly influential US non-farm payrolls report.
The FOMC announcement could trigger Euro to USD movement overnight and with economic data for the Eurozone limited on Thursday, any additional movement in the currency will be the result of global economic developments.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,
,US Dollar,1.3859,
Euro,,British Pound,0.8222,
Euro,,Australian Dollar,1.4959,
Euro,,New Zealand Dollar,1.6155,
Euro,,Canadian Dollar,1.5205,
[/table]
