- Richard Curtin from the University of Michigan
Following the impressive rally that was provoked by dovish FOMC minutes, EUR/USD moved slightly lower on Friday, as the greenback finished the week on a high note. Despite hopes the ECB will launch the U.S.-style soon, cautious comments from Janet Yellen provided a massive sell-off of the buck, as winter has stronger-than-expected effect on the economy. After moving above 1.39-mark, the most traded currency pair fell back to 1.3863.
The main reasons for a short-lived strengthening of the Dollar were upbeat consumer sentiment from the University of Michigan and stronger-than-expected PPI from the Labor Department. The first report showed that a gauge of consumer sentiment reached 82.6 in April, accelerating from 80.0 recorded in March and hitting the highest since July. A measure of consumer expectations picked up to 73.3 from 70.0, while the barometer of current conditions advanced to 97.1. The figures mean that consumers willing to spend money, providing additional boost to the economy, as households spending accounts for 70% of the economy.
Another positive sign for the Federal Reserve was a stronger-than-projected improvement in the producer prices. The 0.5% increase in wholesales was the biggest since June and followed a 0.1% gain a month earlier. Until inflation moves closer to the official target, the Fed will keep borrowing costs at current level.
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