Source: Forex Analysis
The data in the first half of the day on the German economy and the eurozone maintained the downward momentum of the euro against a number of world currencies. Berlin managed to avoid a recession at the end of last year, but further upward momentum, which was formed in the 1st quarter of 2019, raises a number of questions. Concerns about the prospects for world trade remain high.
According to the report of the National Bureau of Statistics Destatis, the flagship economy of the eurozone in the 1st quarter of this year showed an increase of 0.4% compared with the previous quarter, which fully coincided with economists’ forecasts. Most of the support was provided by the growth of private consumption in Germany, as well as by the construction industry.
On an annualized basis, in the 1st quarter of 2019, Germany’s economy grew by 0.6%, while economists had expected a 0.7% growth.
As for the future prospects, the problems in world trade that remain due to the conflict between the United States and China, will continue to be a deterrent to economic growth, as German exports continue to face pressure. There is also a fairly high uncertainty around the UK exit from the EU. Against this background, it is not surprising that the overall simple GDP of the eurozone in the 1st quarter of this year was fairly restrained, but the recession was still avoided.
According to the data, the eurozone economy grew in the 1st quarter of this year by 0.4% compared to the 4th quarter of 2018, and by 1.2% per annum. The data completely coincided with economists’ forecasts.
All the problems that affect Germany fully apply to the entire economy of the eurozone.
As for the technical picture of the EURUSD pair, the movement continues to evolve under a bearish scenario, and the next target of risky assets sellers is the support area of 1.1160, a breakthrough of which will only increase the pressure on the trading instrument and lead to new lows of 1.1130 and 1.1100.
The Canadian dollar ignored data on annual inflation in Canada, which accelerated slightly in April of this year. The increase was due to higher prices for cars and vegetables.
According to the National Bureau of Statistics of Canada, CPI in April rose by 2.0% compared with the same period of the previous year. Economists also expected the index to grow by 2.0%. Compared with the previous month, the index in April rose by 0.4%, which contributed to the short-term increase in gasoline prices.
As for the basic consumer price index, the figure in April rose by 1.9% after rising by 2%. Let me remind you that the target inflation rate is 2%.
The material has been provided by InstaForex Company – www.instaforex.com