EUR and GBP: Euro buyers are trying to take the lead. Pound falls further while waiting for the results of the vote
The good data on the German labor market was not enough for buyers of risky assets to return to the market in the first half of the day. Weak reports on the French economy led to the resumption of the downtrend.
According to the report, the unemployment rate in Germanyin March reached a new minimum this year, which happened because of the high demand in the labor market.
As noted in the Federal Employment Agency, the unemployment rate in Germany was 4.9% in March against 5% in February. The number of applications for unemployment benefits fell by 7,000 compared with February, while economists had forecast a decline of 10,000. The total number of unemployed in Germany was 2.301 million in March, whereas the previous figure was at around 2.373 million in February.
As I noted above, a weak report on the French economy affected the euro quotes. First of all, traders were worried about the report on the consumer price index, which showed a weaker growth than expected for the month of March this year in France.
According to the report, consumer prices rose by 0.8% in March compared to 1.1% per annum in February. Economists had forecast a consumer price index in France at 1.0% and 1.3%, respectively. As for the index harmonized according to EU standards, it added 1.3% in March against 1.6% per annum in February.
The sharp decline in consumer spending in France will have a negative impact on the future on already slowing economic growth rates. According to the data, expenses fell by 0.4% in February of this year and by 1.8% compared to February 2018. Expenditures were projected to increase by 0.2% compared in February and a decline by 1.3% against last year.
On the contrary, the state budget deficit of France rose to 36.9 billion euros at the end of February against 28.5 billion euros at the end of February 2018 due to more than a sharp decline in income and an increase in expenditure.
As for the technical picture of the EUR/USD pair, it remained unchanged. The further downward trend will continue with the minima in the region of 1.1200 and 1.1170. However, the main goal of sellers of risky assets is to test the support level of 1.1150. Under the scenario of the upward correction of the euro, sellers will not take long to wait in the area of major resistance at 1.1270 and 1.1295.
The British pound fell against the US dollar and continued its downtrend pending a vote in the British Parliament on the Brexit issue.
There was pressure on the pound in the first half of the day amid a weak report on the investments of British companies, which decreased again in the 4th quarter of 2018 for the fourth time in a row.
According to the data of the National Bureau of Statistics of the United Kingdom, capital investments of companies decreased by 0.9% compared with the previous quarter in the 4th quarter of 2018.
The weak growth of the UK economy at the end of last year also did not make traders happy.
According to the GDP data in the 4th quarter, it grew by only 0.2% compared with the previous quarter. In comparison to the growth in the same period of the previous year, it was revised upward to 1.4% from 1.3%.
The current account deficit of the balance of payments amounted to 23.7 billion pounds in the 4th quarter against 23 billion pounds in the 3rd quarter.The material has been provided by InstaForex Company - www.instaforex.com