Noor Trends News, Technical Analysis, Educational Tools and Recommendations
The EUR/USD pair hits a two-month low amid US debt-ceiling concerns as well as positive US economic data though Fitch places US “AAA” debt rating on negative watch despite lower unemployment claims and a rise in Q1 GDP. Germany’s Q1 GDP plunge puts additional pressure on the Euro, with central bank commentary stirring markets.
EUR/USD continued to fall for three straight days and reached a new two-month low of 1.0707, as the dollar remains strengthening across the FX board. Uncertainty around the US debt-ceiling discussions and upbeat US economic data bolstered the US Dollar (USD). Therefore, the EUR/USD is trading at 1.0725 after hitting a high of 1.0756.
German recession adds weight to falling Euro, as central bank comments stir sentiment. On the other front, data from the US Bureau of Labour Statistics revealed that unemployment claims for the last week rose by 229K below estimates of 245K, signaling a solid labor market. At the same time, growth in the US for the first quarter was upwardly revised, revealing the BLS. Gross Domestic Product (GDP) rose by 1.3%, against the preliminary 1.1% figure, portraying a solid economy.
On the Eurozone (EU) front, the largest economy of the bloc, Germany, was in recession in Q1 as GDP plunged 0.3%, weighing on the Euro (EUR), which extended its losses from 1.0740 toward the 1.0710 area. Central bank speakers gave fresh remarks in both the United States and Europe. Boston Fed President Susan Collins commented that the time to pause its tightening cycle is getting closer. ECB member Klass Know said that “at least” two more rate hikes of 25 bps are needed in the Euro Area and stressed the need to stay put for a significant time.
