The Euro plunged to its three months lows. Overview for 14.02.2019

On Thursday morning, the major currency pair is trading near its local lows; EURUSD is off its luck.

The European currency updated its three months low against the USD on Thursday morning, but recovered a little bit later. The current quote for the instrument is 1.1280.

The USD is once again supported by the increase of 10-year bonds profitability and neutral statistics on the inflation from the USA. The CPI didn’t change in January against market expectations of +0.1% m/m, while the Core CPI expanded by 0.2% m/m. The core indicator is more interesting, because it excludes volatile goods. The funny fact that the USD is not influenced by the news about the US national debt, which reached 22 trillion. 

Yesterday’s report on the Industrial Production was disappointing. The indicator lost 0.9% m/m against the expected reading of -0.4% m/m. The decline continues due to the decrease of capital goods and investments. It’s a very bad signal. 

The economic calendar is full of numbers and events on Thursday. Germany is going to publish a preliminary report on the GDP in the fourth quarter 2018. The indicator is expected to recover by 0.1% q/q after losing 0.2% q/q the quarter before. As for the Euro Area, the GDP is expected to expand by 0.2% q/q, the same as in the previous quarter. If numbers from Germany aren’t good enough, the Euro may continue falling. Germany is the key economy in the Euro Area, and if it continues to slow down, all other economies will be influenced as well.

Later in the evening, the USA are scheduled to report on the Retail Sales in December. The indicator may rise a bit and add 0.1% m/m, but it’s worse than in November (+0.2% m/m). This small growth will not surprise anyone: December is the time of biggest sales in the USA and everything is usually pretty fine. However, in the fall American consumers showed that they weren’t ready to spend a lot of money. Low readings may indicate poor consumer confidence and later result in reduction of the labor market numbers as well.