The main currency pair is falling; investors were upset by the statistics from the Euro Area.
EURUSD is trading to the downside on Thursday afternoon due to disappointing macroeconomic reports. The current quote for the instrument is 1.2260.
The numbers published in the afternoon weren’t impressive. The Retail Sales in the Euro Area added just 0.1% m/m in February after losing 0.1% m/m the month before and against the expected reading of +0.6% m/m. On YoY, the indicator expanded by 1.8%. The main reason why the indicator slowed down was the non-food goods. In addition to that, January readings were revised downwards, which was not a good sign at all: as a rule, if the Retail Sales indicator is weak at the beginning of the year, it is very unlikely to recover quickly later.
In the meantime, the Producer Price Index increased by 0.1% m/m in February after adding 0.4% m/m in the previous months, although it wasn’t expected to change.
Investors have been receiving a lot of rather mixed signals from the Euro Area recently. There is nothing to worry about as long as the QE program is active and the European Central Bank keeps track of all what is happening inside its financial system. However, if these signals and numbers transform into a tendency at the time when the QE program is scheduled for closure, the Euro Area may be forced to continue providing support to its financial sector (negative for the Euro) or not to interfere and “let everything go” (impossible to image what might happen).
In other words, one shouldn’t overestimate today’s weak numbers, but these indicators are really worth following in the long-term.
RoboForex Analytical Department