EUR/USD – Euro ticks higher, Eurozone trade surplus slips

May 16 10:05 2019 Print This Article

EUR/USD continues to have an uneventful week. Currently, the pair is trading at 1.1212, up 0.08% on the day. On the release front, the eurozone trade surplus narrowed to EUR 17.9 billion in March, down from 19.5 billion a month earlier. This was well short of the estimate of EUR 19.0 billion. It’s a busy day in the U.S., with the release of building permits, unemployment claims and the Philly Fed Manufacturing Index. On Wednesday, the eurozone releases consumer spending reports, while the U.S. posts UoM Consumer Sentiment.

The eurozone economy has been struggling, and even the German locomotive has shown signs of weakness. The manufacturing sectors have been hit particularly hard, as the global trade war has dampened the appetite for German and European exports. The U.S. and China have been holding talks to diffuse trade tensions, but President Trump slapped new tariffs on Chinese products, with China quick to respond with counter-tariffs. Investors are worried if the trade war escalates, Trump could target European cars made in China, which would hurt the massive German auto sector. This has led to sharp losses for German automaker listings on the DAX, which include BMW, Daimler and Volkswagen. On Wednesday, the U.S. announced a 6-month moratorium on tariffs on European and Japanese vehicles, but investors will likely remain nervous that the U.S. could impose further trade sanctions against China.

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