Fundamental Headlines
• Europe’s Woes Vex Asian Exporters – Wall Street Journal
• No News is Good for Euro – Wall Street Journal
• Eurozone Industrial Production Surges - Financial Times
• U.K. Deficit Narrower Than Forecast; Budget Office Predicts Weaker Growth - Bloomberg
• Euro Volatility Signaling Weakness as Traders Lose Confidence in Currency - Bloomberg
EUR/USD – Industrial production in the 16-member euro area exceeded economists’ forecasts in April. Output advanced 0.8 percent from March, when it rose by a revised 1.5 percent, while figures topped expectations for a 0.5 percent rise. At the same time, production jumped an annualized 9.5 percent after climbing an upward revision of 7.7 percent in March. Taking a look at the breakdown of the report, the production of capital goods expanded 1.1 percent from March, while energy goods production retreated 0.9 percent in April to taper the advance. Indeed, the euro area bloc will remain supported by the global economic recovery and a weak euro as the European debt crisis continues to linger. It is noteworthy that the momentum maybe fading as the euro-zone purchasing manufacturing index in May fell to its lowest level since February. Though Europe looks to have recovered from its worst downturn since the Second World War, we may see the 16-member euro area slip back into recession by the end of the year as ballooning budget deficits lead governments to phase out stimulus measures. To discuss this and other topics, please visit the EUR/USD forum.
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Written by Michael Wright, Currency Analyst
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Michael Wright is the author of FX Headlines, Fundamentals vs. Technical’s, Weekly Spotlight, and Forex Trading Weekly Forecast
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