Euro Remains Supported By Expectations Of ECB QE Program End

Market Reviews

The euro continued the growth against the US dollar, supported by numerous comments from ECB representatives that the regulator is ready to begin a substantive discussion of the curtailment of the asset purchase program. Also in the focus of investors' attention were data on the euro area's GDP and production orders in Germany.

Eurostat has confirmed that the Eurozone economic growth increased by 2.5% in Q1 compared to the same period last year, in line with market expectations. The growth rate slowed from a quarterly 0.7% and an annual rate of 2.8% in the final quarter of 2017. German Factory Orders fell by 2.5% in April, more than a drop in March by 1.1% (revised from -0.9%). Economists had expected orders to increase by 0.8%.

The British pound collapsed amid rumors about the possible resignation of David Davis (Brexit Secretary) who can not agree with Prime Minister May on a number of issues, including the problem of the Irish border. Earlier, the GBP/USD pair strengthened to 2-week highs against the background of the general weakening of the dollar. In addition, the pound was supported by data on Halifax housing prices, which rose by 1.5% in May compared with the previous month, after a decrease of 3.1% in April.

US initial jobless claims fell by 1k to 222k in the week ended June 2, below expectation of 225k. The four week moving average rose 2.75k to 225.5k. Continuing claims declined by 6k to 1.72m in the week ended May 26. Four week moving average of continuing claims dropped -13.25k to 1.72875m (the lowest since December 8, 1973).