The euro has ticked lower in the Wednesday session, as the pair trades at 1.0870. On the release front, French data was better than expected. Industrial production posted a gain of 2.0%, above the estimate of 1.2%. France’s trade deficit improved to EUR -5.4 billion, better than the forecast of EUR -5.9 billion. The markets are keeping a close eye on ECB President Mario Draghi, who will speak about monetary policy in the Dutch House of Representatives. There are no major releases out of the US. On Thursday, PPI is expected to show a slight gain of 0.2%, and unemployment claims is forecast to climb to 245 thousand.
Industrial production and manufacturing numbers have long been weak points in the eurozone economy, but first quarter data is showing considerable improvement in France and Germany. French industrial production jumped 2.0% in March, ending a streak of three consecutive declines. The Markit France Manufacturing PMI rose to 55.1 in April, its highest level since 2011. In Germany, industrial production in March declined 0.4%, but this was just a blip, as industrial production in the first quarter posted a respectable gain of 1.6%. German Factory Orders came in at 1.0%, above the forecast of 0.7%. An improvement in global economic conditions has revived the demand for eurozone exports, notably cars and machinery. A weak euro has made European exports more attractive and helped boost the manufacturing sector. Germany releases Preliminary GDP for the first quarter on Friday, with the markets predicting a gain of 0.6%. If the GDP report is stronger than expected, the euro could reverse directions and gain ground.
President Donald Trump has raised many eyebrows in his first 100 days in office, but political Washington is stunned after Trump abruptly fired FBI director James Comey on Tuesday. Comey had been conducting an investigation into possible collusion between Trump and Russia during the presidential campaign. The White House has claimed that it fired Comey over his handling of a email scandal involving Hillary Clinton, but the move has been roundly condemned by the Democrats, and some key Republicans are likely to express their opposition as well. If this political mayhem continues, it could unnerve investors and hurt the US dollar against other major currencies.
