Euro rose on Friday’s session at the end of week after it was supported by high expectations of inflation in Eurozone. In addition, USD declined after US growth data appeared to be lower than the expectations.
Expectations of Consumer Price Index for April rose in Eurozone from 1.2% to 0.7%; however, the core index is up 1.2% which is the new high in three years while the previous reading was at 0.7%.
Euro recovers beyond its decline which happened yesterday after European Central Bank’s meeting and Daraghi’s, Chairman, statement that it was premature to talk about the effect of withdrawing the stimulus program.
EUR/USD is currently traded at 1.0900 after it had reached its highs at 1.0948. This pair opened today session at 1.0867 while it reached its lows at 1.0858.
Slow Growth of US Economy within Q1
On the other side, USD slumped within today trades as GDP data of US economy was lower than expectations, leading to a hike in Euro.
US economic growth goes in Q1 with the slowest progress in three years while consumer spending slightly increased and companies made investments which are lower than the stock. This is likely to be a setback of Donald Trump’s undertaking to enhance the growth.
US Department of Commerce said on Friday that the GDP was up 0.7% when the Government trimmed the defense spending and this reading was the lowest since Q1 of 2014.
The economy achieved growth of 2.1% in Q4 of last year. Economists surveyed by Reuters expected GDP’s rise by 1.2% within Q4. However, this survey was conducted before the preliminary data about the commodity trade shortage in March and the stock was issued on Thursday. Based on such preliminary data, many economists reduced their expectations about the growth in Q1.
Economists say it is difficult that Trump fulfills his undertaking to increase the annual GDP up to 4% without increasing the productivity.
Consumer spending which constitutes over two thirds of US economic activity is up 0.3% in Q1, which is the slowest growth since Q4 of 2009 and comes after a strong rate of 3.5% in Q4.
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