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What’s happening: The EUR/USD edged lower on Thursday, following the release of several major economic reports.
What happened: The forex pair had surged to a one-year high of 1.1096 in Wednesday’s session amid weakness in the US dollar.
Despite the pressure on the euro on Thursday, the currency pair remained above the key 1.1000 level.
Why it matters: The euro came under pressure on Thursday, as traders assessed several economic reports.
The Eurozone’s consumer confidence indicator climbed 1.6 points to -17.5 in April, the highest reading since February last year. However, this was in-line with market expectations. Also, the economic sentiment indicator came in little changed at 99.3 in April, below market views of 99.9.
The services confidence indicator improved to 10.5 in April, from 9.6 in the previous month.
Germany revised its growth estimates higher and the country’s GfK Consumer Climate Indicator rose for the seventh month in a row to -25.7 heading into May, exhibiting resilience in the economy.
Markets also focused on some major economic releases from the US on Thursday. US economic growth in the first quarter was lower than expected, amid a slowdown in business investment. However, the number of persons filing for jobless benefits declined by 16,000 to 230,000 in the latest week.
Strength in the labour market increased prospects of another rate hike by the Federal Reserve in May, lending support to the US dollar. The US dollar index, measuring the greenback’s performance versus a basket of major peers, rose around 0.05% to 101.50 on Thursday.
The EUR/USD forex pair lost around 0.1% to reach 1.1031 on Thursday, not far from the one-year peak of 1.1096 recorded in the earlier session.
What to watch: Traders await the release of GDP data from the Eurozone today. The Eurozone economy, which grew by 1.8% year-over-year in the final quarter of 2022, is expected to expand by 1% in the first quarter. The European Commission projects the region’s GDP to expand by 0.9% in 2023 and 1.5% in 2024.
Markets will also keep an eye on the Eurogroup meeting and informal ECOFIN meeting, scheduled to take place today.
Context: Shares of Amazon.com edged lower in after-hours trading on Thursday, despite the company reporting upbeat quarterly results.
Details: Amazon’s revenues grew 9% year-over-year to $127.4 billion in the first quarter, exceeding consensus estimates of $124.53 billion. The company reported earnings of 35 cents per share, beating Wall Street expectations of 21 cents per share.
Sales in North America grew 11% year-over-year to $76.9 billion, while international sales came in at $29.1 billion, up 1% year-over-year.
AWS revenues surged 16% year-over-year to $21.4 billion, slowing from 20% in the prior quarter. Operating income fell 21.8% to $5.1 billion. Management said during the earnings call that companies were spending “more cautiously” in the current macro environment.
Amazon guided to net sales of $127.0-$133.0 billion for the second quarter, broadly in-line with market estimates of $129.83 billion.
How shares responded: Amazon’s shares fell 2.1% to $107.54 in after-hours trading on Thursday, following the release of quarterly results. The stock added around 4.6% during the regular trading session ahead of the results.
What are expectations: Investors will keep an eye on the macroeconomic environment and improvements in business sentiment, which could boost Amazon’s AWS business.
Other Markets: US trading indices closed higher on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 1.57%, 1.96% and 2.76%, respectively.
Ukraine’s Kyiv was hit by explosions with air raid sirens being reported across the country. The safe-haven US dollar index rose this morning.
Singapore’s unemployment rate fell to 1.8% in the first quarter, from 2.0% in the previous quarter, lending support to the SGD/USD forex pair.
Australia’s private sector credit rose by 0.3% in March, following a 0.4% increase in the previous month. The news sent the AUD/USD pair higher in forex trading this morning.
Japan’s industrial production grew by 0.8 % in March, slowing from last month’s 4.6% growth, which exerted pressure on the JPY/USD forex pair.
New Zealand’s ANZ Roy Morgan Consumer Confidence Index improved to 79.3 in April, from 77.7 in the prior month. The news sent the NZD/USD pair higher in forex trading this morning.
France’s GDP growth rate, household spending, inflation rate and producer prices, Germany’s import prices, unemployment rate, unemployment change, unemployed persons, GDP growth rate and inflation rate, South Africa’s private sector credit, balance of trade and money supply M3, Spain’s gross domestic product, consumer price inflation and current account, Turkey’s tourism revenues, tourist arrivals, balance of trade, exports and imports, Italy’s GDP growth rate and industrial sales, India’s central government budget value, foreign exchange reserves and infrastructure output, Russia’s money supply M2 and Central bank of Russia interest rate decision, Brazil’s unemployment rate, producer prices and IBC-Br index of economic activity, Mexico’s gross domestic product, Canada’s GDP and government budget value, US personal income, personal spending, core PCE prices, employment cost index, Chicago PMI, University of Michigan consumer sentiment and Baker Hughes crude oil rigs, Central bank of Argentina interest rate decision, as well as Indonesia’s foreign direct investments.
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