Neil Davies, Head of Trading at PlutusFX, continues to look at the Euro.
The Euro has had a good run against the Greenback over the last couple of weeks. Currently the pair stands at EUR/USD 1.1217, up from a recent low of 1.052 touched on April 13th. Interestingly any talk of parity has subsided since the recent low failed to push through the multi-year low of 1.047 reached the month before.
Assistance for the Euro came with the news that Eurozone inflation came in at 0%, up from the negative figure seen in March. A breakdown on the number indicates that, for now at least, deflation is off the cards. Service sector and food, alcohol and tobacco were positive, with the drag being energy prices, which showed a 6% decline in April. With oil prices now moving forward, future drag of oil costs will diminish and push inflation into the positive.
The ECB of course claimed credit that their policy measures had banished the spectre of deflation.
Unemployment across Europe remained constant in March as in February at 9.8%. Typically across Europe the disparity remains, Germany having a jobless rate of 4.7%, with Southern Europe still topping the charts: Spain at 23% and Greece 25.7%
It will be Greece where the focus lies once more as further debt payment deadlines approach that could trigger their exit. We can therefore safely assume that the Germans have yet to pay the €270bn demanded in Nazi war reparations.
