Euro Slightly Higher After Eurozone GDP Report
The euro has stabilized slightly against the US dollar. The euro/dollar pair increased by 0.05% and is trading at the level of 1.1999. Growth in the Eurozone economy slowed slightly in the first quarter, further dampening expectations that the European Central Bank will soon start scaling back stimulus. Eurostat said the euro area economy grew by an annualized 2.5% in the three months to March. That was down from 2.7% in the fourth quarter and in line with estimates. The economy expanded by 0.4% in the first quarter.
Eurozone final manufacturing PMI slipped for a fourth month, falling to a 13-month low of 56.2 from March's 56.6, above a preliminary reading of 56.0. German manufacturing PMI fell to 58.1 from 58.2 in March. Meanwhile, UK construction PMI rose to 52.5 in April, compared to forecasts for a reading of 50.5. The prior month’s reading was 47.00, which was a 20-month low.
The Federal Reserve is widely expected to keep the benchmark lending rate, but traders would focus on whether the Fed would change the outlook for future rate hikes this year, after recent data suggested signs of possible acceleration in the US economy. The Fed last raised rates in March, and some analysts see the Fed raising rates once each quarter – in June, September and December.