15.05.2019: Bears holding upper hand on EUR (EUR, USD, GBP)
The euro and the pound sterling have been weighed down by weak statistics from the eurozone. On the other hand, the US dollar found support from the Federal Reserve.
This trading day is of crucial importance to the single European currency which has been trading with record low volatility since early 2019. After a brief bounce, the euro/dollar pair retraced to 1.12 which is the lower border of a trading range. In the mid-European session, the pair was trading at the level of 1.1211.
Germany’s economy expanded for the first time in three quarters. However, its recovery could be halted by trade disputes. Germany’s GDP advanced 0.4% sequentially in the first quarter. On a yearly basis, gross domestic product climbed 0.7%. Besides, the eurozone’s economy grew 1.2% in annual terms confirming the flash estimate. The market was discouraged by the data, thus making the euro decline. At the same time, the US currency gained support from the latest remarks of Federal Reserve’s officials as their comments reduced the likelihood of a rate cut this year.
The pound sterling has not recovered yet after yesterday’s negative data. Today, the pound is extending weakness versus the US dollar. The British currency came under pressure as average earnings in the UK edged down on a yearly basis in the first quarter. On the whole, UK wages remain solid compared to wages in the European Union. Nevertheless, the pound sterling is still unable to gain ground. The pound/dollar pair is trading at near 1.2902 heading lower for 1.2880.
The unsolved Brexit gridlock has made a profound bearish effect on the sterling. Leader of the Labourist fraction in Parliament John McDonnell stated that the cross-party talks on a Brexit deal were close to failure.
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