The euro started today’s trading session by gaining significant ground against the US dollar, but went on to retrace some of its gains later in the day. The euro hit a weekly high against the US dollar based on weak data released from the USA regarding consumer spending and income. The euro’s brief rise was also backed by the economic bulletin released by the European Central Bank today.
The data released by the Bureau of Economic Analysis today indicated that consumer spending in the USA had increased by 0.2% in November as compared to the expected figure of 0.3%. Consumer income also remained the same against the predicted increase of 0.3%. The personal consumer expenditure price index also remained the same during November on the backdrop of a 0.3% increase in October.
The ECB released its economic bulletin today elaborating the reasons for its continued quantitative easing measures, which triggered the euro’s slight gain over the dollar. However, the euro retraced its gains despite the slight increase in November inflation figures reported in the bulletin.
The ECB predicts that real GDP growth shall be around 1.7% in 2016 and 2017 decreasing slightly in 2018 and 2019 to 1.6%. The ECB’s current outlook indicates that the economies of most European countries will continue struggling to create sustained economic growth in the near future.
The EUR/USD traded at a high of 1.0499, but retraced most of its gains to trade at 1.0438 as at 18:52 GMT. The EUR/JPY tested highs of 123.19, but lost most of its gains to trade at 122.78 at the time of writing.
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