According to the Eurostat statistics agency, growth in the single currency region advanced from January to March at a greater pace than the previous estimate, thus giving the bloc 1.7% growth on a yearly basis. Meanwhile, economists did not expect some changes in the year-on-year or quarter-on-quarter data. The statistical office of the European Union said that the rise was supported by strong household spending, which rose to 0.6% from 0.3% during the previous quarter, as well as taking into account a stable increase in exports which accelerated by 0.4%.Within the Euro zone, Romania and Cyprus announced the steepest growth at 1.6% and 0.9%, while the Germany's economy expanded by 0.7%. However, Hungary, Greece and Poland economies slowed down, while record decrease was booked for Hungary (-0.8%), Greece (-0.5%) and Poland (-0.1%), respectively. Britain's economy, the largest within the Euro zone, posted quarterly growth of 0.4% and a 2% expansion in GDP on an annual basis, while GDP in Estonia remained stable. Currently, the Euro zone has struggled with feeble growth, is trying to eliminate low inflation and decrease unemployment rate, after emerging from recession three years ago. The more recent problems including renewed concerns over Greece and the potential Britain‘s exit from the EU also puts additional pressure.
German factory orders have declined significantly, as demand for investment goods from outside the Euro zone slumped in April, strengthening worries about stagnation in the German industry. According to the latest release of the Economy Ministry in Berlin, the data dropped 2% from the prior month, when it rose to a revised 2.6%. The reading, which is usually volatile, is incomparable to economists' predictions for a decline of 0.5%. Moreover, orders slid 0.5% from a year earlier. On a yearly period, the index also went down, losing 0.5% against forecast of 0.6% of expansion. Overall, following decrease was provoked by a 4.3% drop in foreign orders, primarily from outside the 19-nations' region, while domestic orders increased by 1.3%. Meanwhile, within foreign demand, new orders from the Euro area surged 2.5% for the previous month, while new orders from other countries slipped 8.3%. Orders for intermediate goods, in turn, added 4.8%, while the manufacturers of capital goods showed a monthly fall of 6.1%. For consumer goods, a decrease in new orders of 1% was registered. In the meantime, the Bundesbank last week cut its forecast for German growth in 2016 and 2017, simultaneously affirming a robust economic trend as well as strengthening labor market conditions.
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EUR/USD appreciates steadily on Wednesday
Daily chart: The European currency gained strength against the US Dollar on Tuesday, as it appreciated from 1.1355 to 1.1374. In addition, the movement north of the pair happened steadily without much volatility, favouring the more conservative bulls. At the moment, the currency exchange rate is located between the monthly PP at 1.1282 and monthly R1 at 1.1466. Moreover, the monthly PP and R1 are supported by the weekly PP and R1 respectively at 1.1279 and 1.1463. If the pair continues its movement upward, EUR/USD will also face the upper Bollinger band at 1.1452.SWFX traders increase bearish sentiment
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade at 1.12 by August
Meanwhile, traders, who were asked regarding their longer-term views on EUR/USD between May 8 and June 8 expect, on average, the currency pair around 1.12 by the end of August. Though 52% (+1%) of participants believe the exchange rate will be generally below 1.12 in ninety days, with 32% alone seeing it below 1.08. Alongside, only 24% (-1%) of those surveyed reckon the price will trade in the range between 1.12 and 1.18 on August 31.Dukascopy Community members are bearish on this week's perspectives of EUR/USD