Euro Lower, German Consumer Confidence Improves
MichelleThe euro is slightly lower on Tuesday. In the European session, EUR/USD is trading at 1.1392, down 0.31% on the day. German cons
The euro is slightly lower on Tuesday. In the European session, EUR/USD is trading at 1.1392, down 0.31% on the day.
German consumer climate hits 6-month high
German consumer confidence remains weak but showed some improvement in April, rising to -20.6. This was higher than the revised -24.3 in March and easily beat the market estimate of -26.0. This was the highest reading since Nov. 2024.
Consumers remain anxious about the negative impact of US tariffs but the domestic political situation has stabilized as a new government is taking shape.
Business confidence also improved in April, rising to 86.9 from 86.7 and beating expectations. This was the highest level since July 2024, as the business sector has reacted positively to the government’s pledge to increase spending on infrastructure and defense. As with consumers, businesses expressed concern about the escalation in global trade tensions.
Markets eye German inflation, retail sales
Germany releases the April inflation on Wednesday. CPI is expected to remain at 0.4% m/m. Annualized, CPI is projected to ease to 2.1% from 2.3% in March and 2.6% in February. Germany’s retail sales are expected to decline by 0.4% m/m in March, after a strong gain of 0.7% a month earlier. A drop in inflation and retail sales would support the case for the European Central Bank continuing lower interest rates.
In the US, the focus will be on employment data in the second half of the week. JOLTS Job Openings, which will be released later today, is expected to ease to 7.48 million from 7.56 million. This would mark a second consecutive deceleration and point to a weakening labor market.
All eyes are on Friday’s nonfarm payrolls, which surprised on the upside last month with a gain of 228 thousand, blowing past the forecast of 140 thousand. The market estimate for April nonfarm payrolls stands at 135 thousand.
EUR/USD Technical
- EUR/USD is testing support at 1.1391. Below, there is support at 1.1358
- 1.1454 and 1.1487 are the next resistance lines
