EUR/USD continued its downward trend over the week, set to record losses of 0.70%, having declined by 0.20% on Friday, even in light of mixed economic data from the US. In the European Union, Retail Sales surpassed expectations; however, traders continue to concentrate on the movements of the US economy and the Dollar. The pair is currently trading at 1.1636, following a daily high of 1.1662.
The EUR/USD pair experiences a decline this week, driven by the strength of the Dollar, which outweighs the mixed signals from US payrolls and housing data. Eurozone Retail Sales exceeded expectations; however, the resulting gains do not alter the prevailing sentiment influenced by US-driven flows. Attention turns to inflation data and remarks from central bank officials in Europe and the US in the upcoming week.
> The Euro continues to face pressure amid mixed data from the US, with investors closely monitoring the dynamics of the Dollar: December’s Nonfarm Payroll figures revealed a gain of 50K jobs, falling short of the anticipated 60K increase and also below the previous month’s 64K result. Nevertheless, the Unemployment Rate edged lower from 4.6% to 4.4%, revealed the US Bureau of Labor Statistics. Additional data indicated that the housing market persisted in its loss of momentum, with both Building Permits and Housing Starts in October showing a decline compared to November’s figures. Meanwhile, the preliminary report for January from the University of Michigan Consumer Sentiment exceeded expectations. In the Eurozone, consumer consumption saw an increase in November, rising by 0.2% month-over-month, marking an improvement from October’s stagnant reading and surpassing expectations. German data presented a mixed picture throughout the day, with Industrial Production surpassing expectations, while the trade balance contracted due to a decline in exports.
Latest FX Rate Trends: Euro impacted by the strength of the US Dollar
- In addition to the US jobs data report, October’s US Building Permits experienced a slight decline of 0.2%, decreasing from 1.415 million to 1.412 million. Housing Starts experienced a decline, with a decrease of 4.6% MoM to 1.246 million, down from 1.306 million in September.
- The preliminary reading for January of the University of Michigan Consumer Sentiment increased to 54, an improvement from November’s final figure of 52.9, surpassing expectations of 53.5. Inflation expectations among Americans for the one-year horizon remained steady at 4.2%, whereas the five-year expectations saw a slight increase to 3.4% from the previous 3.2%.
- Money markets persisted in pricing in 50 basis points of easing as the year draws to a close, as revealed by the CME FedWatch Tool.
- Atlanta’s Fed President Raphael Bostic remarked that job growth “was modest,” further noting regarding inflation that it “will take more time to make up for missing reports from last fall.”
- Later, Richmond Fed Thomas Barkin indicated that the labor market is stable, yet hiring continues to be uncomfortably narrow. He noted that it will take until April for inflation data to be completely updated.