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EUR/USD Down on GDP Reports from Eurozone

May 15, 2013 by

EUR/USD declined today, extending yesterday’s drop, after the release of data about economic growth in the eurozone countries. France and Italy remained in recession, while the German economy barely managed to demonstrate growth. Eurozone gross domestic product shrank 0.2% in the first quarter of 2013 — less than in the previous three months, but more than was predicted. (Event A on the chart.) Data from the United States was not good either.

PPI edged down 0.7% in April, while analysts have anticipated a drop at the March’s rate of 0.6%. (Event B on the chart.)

NY Empire State Index dropped from 3.1 in April to -1.4 in May, the first negative reading since January. It was a nasty surprise as market participants have expected an increase to 3.6. (Event B on the chart.)

Net foreign purchases fell $13.5 billion in March, almost the same rate as the February’s $13.3 billion. The actual change was much worse than the forecast increase of $33.8 billion. (Event C on the chart.)

Both industrial production and capacity utilization rate fell in April. Production ticked down 0.5% in April after rising 0.3% in March, while analysts have predicted a drop by 0.1%. Capacity utilization went down from 78.3% to 77.8% even though specialists have predicted that it would stay unchanged. (Event D on the chart.)

Crude oil inventories decreased by 0.6 million barrels last week instead of rising 0.5 million as was predicted. The reserves were up 0.2 million in the week before. Total motor gasoline inventories increased by 2.6 million barrels last week. (Event E on the chart.)

Yesterday, a report on import and export prices was released. Import prices fell 0.5% in April, matching forecasts exactly, after declining 0.2% in March (revised 0.5%). Export prices fell 0.7% last month following the 0.5% drop in the month before. (Not show on the chart.)

EUR/USD for 2013-05-15

If you have any comments on the recent EUR/USD action, please reply using the form below.

One Response to “EUR/USD Down on GDP Reports from Eurozone”

  1. John D. Alright

    I am still surprised that the Euro is still so high given the economic challenges Europe is facing. Many countries like France and Italy are facing major deficit issues with very little room to solve them given the strength of the unions, whom, as soon are you start to talk about changing the retirement system to reflect people living longer, call for a nation wide strike. At least Germany was able to negotiate with the unions to progressively increase the retirement age from 65 to 67, albeit very slowly (I think it will be done by 2029, yes 29!). France, which retirement age is age 62 is now thinking of taxing the retirees.

    Reply

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