Euro/US dollar carries a steady with PCE cleaning in the United States, and he met commercial tensions twice the US dollar
- EUR/USD is raised by the most softened PCE US, but basic inflation is still sticky between 2 % – 3 %.
- Trump restores China’s tensions, the ruling on a tariff. “Selling America” is gaining traction.
- German retail sales are drowned, while the possibilities of the European Central Bank are reduced to a rise in the policy meeting on June 5.
The euro (EUR) remains fixed against the US dollar (US dollar) on Friday after the PC PSV (PCE), which was softer, which was close to the Federal Reserve (Fed) 2 %, raised the pair from its lowest daily levels 1.1312. EUR/USD is traded at 1.1361, almost unchanged per day.
The market mood is still fragile, and moved between optimism and pessimism, which makes us compressed shares due to definitions and commercial news. The American International Trade Court ruled that the customs tariff was illegal and ordered Washington to lift it within ten days. However, the Trump administration appealed the decision in a federal court, which returned most of the duties imposed on April 2, “Tahrir Day”.
President Donald Trump has sparked a shift in feelings after stating that China is not committing to fulfilling the terms of the Trade Agreement in Switzerland. However, he said he would speak with Chinese President Xi Jinping to accelerate negotiations between Washington and Beijing.
In addition to the commercial policy, the approval of the “beautiful beautiful bill” of Trump, is expected to add trillion dollars to already a high financial deficit, keeping merchants tending to assets outside the United States in the alleged “Sell America” trade.
In terms of data, the American schedule revealed that PCE numbers move in the right direction, but not that basic PCE, which remained stopped at the center point between 2 % and 3 %. Meanwhile, an improvement in the feelings of consumers, as the University of Michigan (UOM) revealed that American families turn into a little optimism about the economy despite the prediction of jumping in inflation.
Through the pond, German retail sales fell on a monthly basis. Inflation in Germany and Spain remains within the borders of the European Central Bank (ECB) by 2 %, which may increase the chances of reducing the average central bank of the European Bank at the June 5 meeting.
Daily drivers on the euro market
- The US PCE increased by 2.1 % on an annual basis, less than 2.3 % in March. However, the preferred inflation scale of the Federal Reserve, which is the main PCE, reflects the development of the inflation process, with a 2.5 % print on an annual basis in April, a decrease from 2.6 %.
- UOM’s morale has improved from 50.8 to 52.2, which exceeds estimates about their final reading. It should be noted that inflation forecast fell. During the next 12 months, expectations decreased from 7.3 % to 6.6 %, and between the next five years, it decreased from 4.6 % to 4.2 %.
- Federal reserve officials said on Thursday that monetary policy remains in an appropriate position, noting that it will take some time to assess transformations in the balance of risk associated with its double mandate to achieve maximum work and price stability.
- German retail sales decreased by 1.1 % illiterate in April, less than an increase in March by 0.9 % and 0.2 % estimates. Regarding inflation, the HICP index (HICP) for the month of May reaches 2.1 % on an annual basis, that is, less than 2.2 % in April, which approached the European Central Bank’s goal by 2 %.
- Spain Flash HICP has decreased from 2.2 % to 1.9 % on an annual basis, under the goal of the European Central Bank.
- The players in the financial market have had a complete price in expecting that the European Central Bank would reduce the rate of deposit facilities by 25 BPS to 2 % in the upcoming monetary policy meeting.
Technical expectations EUR/USD: Hovering about 1.1350 without direction
Euro/US dollar remains biased up, but the trend has stopped before the weekend. The bulls seem to have lost some momentum due to failure to overcome the number 1.14, which could have had prices to challenge the highest level on April 22 1.1547, before the peak of the year (YTD) of 1.1572.
Although the RSI Index indicates that buyers control, RSI decreases, about to reach a 50 neutral basin.
Therefore, if EUR/USD achieves a daily closure less than 1.1350, the husband may be swept away by 1.1300. On more weakness, the next floor level will be the simple moving average for 20 days (SMA) at 1.1272, followed by SMA for 50 days at 1.1193.
Common questions euro
The euro is the currency of the 19 European Union countries belonging to the eurozone. It is the second most traded currency in the world behind the US dollar. In 2022, it represented 31 % of all foreign exchange transactions, with an average daily rotation of more than $ 2.2 trillion per day. EUR/USD is the most trading currency pair in the world, which represents an estimated 30 % of all transactions, followed by EUR/JPY (4 %), EUR/GBP (3 %) and EUR/AUD (2 %).
The European Central Bank (ECB) in Frankfurt, Germany, is the backup bank. The European Central Bank sets interest rates and runs monetary policy. The primary mandate in the European Central Bank is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary performance is to raise or reduce interest rates. Relatively high interest rates – or expect higher rates – usually benefit from the euro and vice versa. The Board of Directors of the European Central Bank is making monetary policy decisions at eight times a year. Decisions are made by the heads of national banks in the eurozone and six permanent members, including the President of the European Central Bank, Christine Lagarde.
The inflation data in the euro area, measured by a coordinated index of consumer prices (HICP), is an important economist for the euro. If inflation increases more than expected, especially if it is 2 % higher than the European Central Bank’s goal, then the European Central Bank is obliged to raise interest rates to return it in control. Relatively high interest rates usually benefit compared to its euro counterparts, as it makes the region more attractive as a place for global investors to stop their money.
Data ejaculates a measurement of economics health and can affect the euro. Indicators such as GDP, manufacturing, PMIS, employment services, and consumer morale surveys can affect the trend of uniform currency. The strong economy is useful for the euro. Not only is to attract more foreign investment, but the European Central Bank may encourage interest rates, which will enhance the euro directly. Otherwise, if economic data is weak, the euro is likely to decrease. Economic data of the four economies in the eurozone (Germany, France, Italy and Spain) are of particular importance, because it represents 75 % of the eurozone economy.
Other important version of the euro is the commercial balance. This indicator measures the difference between what a country gains from its exports and what it spends on imports during a certain period. If a country produces very absolute after exports, its currency will obtain a purely value of the additional demand created from foreign buyers who seek to buy these goods. Therefore, the positive and positive trade balance enhances the currency and vice versa to achieve a negative balance.
