The text discusses market updates including GDP data for the Euro area and Germany, US economic docket, US Dollar performance, US Treasury bond yield, Japan’s intervention in foreign exchange markets, EURUSD gains and losses, Retail Sales data from Germany, Private Sector Credit and Retail Sales data from Australia, PMI data from China, AUDUSD performance, GBPUSD performance, and Gold price movements.
The EURUSD pair is struggling to hold above the round-level resistance of 1.0700 in European trading as investors await key economic indicators in the Eurozone, including preliminary Q1 GDP and CPI data. ECB policymakers have differing opinions on interest rate cuts, with some expecting cuts to start in June and potentially continue at a pragmatic pace, while others are concerned about higher service inflation and are not convinced that inflation will return to target in a timely manner. In Monday’s session, investors focused on German preliminary inflation data for April.
By end-February 2024, the government had accumulated cash deposits of over €3.5 billion at the Central Bank and €2.1 billion at commercial banks.
Eurozone consumers lowered their expectation for inflation over the next 12 months in March but continued to see price growth above the European Central Bank’s 2 per cent target. The ECB is planning to cut interest rates in June.
Overall business activity in the eurozone expanded at its fastest pace in nearly a year, driven by a buoyant recovery in the service industry.