Eur/usd - page 269
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French factory activity contracts at slowest pace in 12 months in May
Manufacturing activity in France contracted at the slowest pace in 12 months in May, boosting optimism over the economic outlook of the euro zone’s second largest economy, preliminary data showed on Thursday.
In a report, market research group Markit said that its preliminary French manufacturing purchasing managers’ index inched up to a seasonally adjusted 49.3 this month from a final reading of 48.0 in April. Analysts had expected the index to rise to 48.5 in May.
Meanwhile, the preliminary services purchasing managers’ index rose to a seasonally adjusted 51.6 this month from 51.4 in April, below expectations for a reading of 51.9.
The seasonally adjusted Markit Flash France Composite Output Index, which measures the combined output of both the manufacturing and service sectors increased from 50.6 in April to 51.0 in May.
A reading above 50.0 on the index indicates industry expansion, below indicates contraction.
Commenting on the report, Jack Kennedy, Senior Economist at Markit said, "The French private sector posted further modest output growth in May, suggesting that economic expansion is being maintained through the second quarter."
The data suggest that first-quarter GDP will show a modest rise following the 0.1% increase in the final quarter of 2014."
EUR/USD was trading at 1.1111 from around 1.1101 ahead of the release of the data, while EUR/GBP was at 0.7151 from 0.7149 earlier.
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EURUSD fell on yesterday session for the third day in a row but this time with a narrow range and closed near the middle of the daily range. The currency made its low at 1.1058 a Fibonacci retracement of 38.2 this suggests that is going to a consolidation mode within a daily support zone from 1.1237 down to 1.1097.
USD is seriously rising against the EUR for a third day, approaching to significantly important level around 89-day moving average located at the psychological level at 1.1000.The strong downward movement in the direction of long-term trend increases the probability of breaking the current resistance at 1.1000. In fall below this level, the long-term advantage of the dollar will be confirmed.
The market is calm today before tomorrows 2 speeches from Draghi and Yellen. EUR/USD open an close prices today are very narrow.
ECB's Draghi says growth is too low everywhere
May 21 Economic conditions in Europe have improved recently but growth remains too low, as does inflation in some countries, the president of the European Central Bank said on Thursday.
"Recently, economic conditions have improved somewhat in Europe but growth is too low everywhere," Mario Draghi told an audience of central bankers and academics at an ECB event in Portugal.
He said that "inflation is too low" in some countries.
Germany Q1 GDP qq 0.3% vs +0.3% exp
No revisions here
EURUSD tried to rally but found enough selling pressure near the 1.1186 Fibonacci level to give all its gains back and closed in the green near the open of the day, creating an inverted hammer pattern. This pattern is considered bullish so we may expect another push upward today.
EUR/USD: Euro Extends Gains After Ifo Shows Optimism
The euro rose against the US dollar after a set of macroeconomic data from Germany showed improved prospects for the euro zone's largest economy.
The first quarter GDP data released earlier on Friday showed the German economy rising 0.3% after the fourth quarter's rise of 0.7%. The growth data met market expectations and supported an early pickup of the common European currency to $1.1165 against the US dollar, as Thursday's set of macro data from the US failed to meet market expectations.
The euro rose further gaining 0.55% to $1.1178 after the German business sentiment indicator rose 108.5 in May, data from Ifo Institute showed on Friday.
The Ifo business sentiment index eased slightly in May compared to April's 103.6, but exceeded market expectations. Moreover, the structure of the sentiment index showed unchanged future economic expectations backed by increasingly positive judgment of current economic situation by the business leaders in Germany.
"In the short run, the fundamentals are sound enough to see another acceleration of the German economy. This is also reflected in today’s increase in the Ifo’s current assessment component. As orders at hand have increased again and inventories have dropped, industrial production should support growth in the coming months," Carsten Brzeski from ING noted after the data releases on Friday.
Later on Friday, central bankers from around the world are scheduled to speak at the ECB's central bankers forum in Portugal. Investors are likely to focus on ECB President Mario Draghi’s speech, where he is once again likely to warn governments that structural reforms must also be seen to take place, for the full effects of QE to be felt.
"The recent rebound in the euro and the oil price, along with a jump in bond yields appears to have prompted a slight change in policy on the part of the ECB, after the surprise announcement by Benoit Coeure that the central bank would be looking to front load its bond buying program in an attempt to keep a lid on yields after the recent sharp rise seen in recent days," Michael Hewson from CMC Markets wrote in a note for clients on Friday.
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EUR recorded a slight rise against the USD on Thursday, breaking a series of three consecutive negative sessions. The pair opened at a rate of 1.1093, then reached the lowest level for the day at 1.1080 and the highest level at 1.1180. The euro ended the day at a rate of 1.1111 and if the price went up, the pair will move towards the resistance at 1.1467. Support: 1.1064; 1.0658; 1.0456; Resistance: 1.1467.
EUR/USD: Dollar Tests $1.10 as Yellen Admits Rate Hike Odds
he US dollar found its lost momentum from the beginning of the current week and roared against the euro currency on Friday afternoon to the three-week low at $1.1002 amid the latest dollar-favorable CPI figures.
Meanwhile, the Federal Reserve Chair Janet Yellen invoked "a variety of transitory factors that occurred at the same time" when talking about the recent weak performance of the US economy during the March quarter.
Therefore, the US dollar marched to a strong weekly gain against the euro - as the cross had opened at $1.1444 on Monday - making it the first profitable week for the greenback in the past six.
On Friday afternoon, the EUR/USD dived 0.92% to trade at $1.1010, while the psychological level of $1.10 was being tested.
Core inflation push
Forex exchange markets saw a major move today in reaction to the pro-dollar April CPI figures from the US, as the Bureau of Labor Statistics published an inflation release almost in line with expectations, while core inflation rose marginally above forecasts.
Looking into details, on a yearly basis, consumer prices in the US dropped 0.2% as forecast in April, a slowdown from the 0.1% fall booked a month before. Stripped of volatile food and energy prices, the gauge added 0.3% and 1.8% on a monthly and annual basis, respectively, versus the 0.2% and 1.8% increases in March.
Later in the afternoon, the Federal Reserve (Fed) Chair Janet Yellen spoke to the Greater Providence Chamber of Commerce, where she said that a rate hike in 2015 would be applicable if the US economy bounces after the softer period seen during the first quarter.
"If conditions improve more rapidly than expected, it may be appropriate to raise interest rates more quickly; conversely, the pace of normalization may be slower if conditions turn out to be less favorable," Yellen said. "To support taking this step, though, I will need to see continued improvement in labor market conditions, and I will need to be reasonably confident that inflation will move back to 2 percent over the medium term."
European events
Meanwhile in Europe, investors digested the modest pace of growth of Europe's powerhouse, as the German economy expanded 0.3% in the three-month period to March, measured on a quarterly basis, after the 0.7% growth booked in the final quarter last year, the Federal Statistical Office said.
When measured on a yearly and non-seasonally adjusted basis, GDP rose 1.1%, a slowdown from the 1.6% expansion in the fourth quarter, the report said, meeting forecasts.
The Ifo business climate reading hit 108.5 points in May, a small tick down from 108.6 booked in April, and compared to 108.3 points expected by analysts. The Ifo Current Assessment index rose to 114.3 points after April's 113.9, beating estimates of 113.5, while the Ifo Expectations slid to 103 from 103.5 previously, in line with projections
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