Forex: EUR/USD – Trades near Friday lows

on Jul 8, 2013
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iNVEZZ.com Monday, July 8th: Ahead of the European opening today, the pair was trading near its Friday lows around 1.2815.

The euro remains exposed to the USD after Friday’s strong US labour market update. The US unemployment rate came in at 7.6 percent, slightly off expectations for 7.5 percent.

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The US Federal Reserve announced in December that it planned to keep interest rates low until the unemployment rate fell to 6.5 percent, as long as inflation remained below 2.5 percent. Inflation usually lags monetary policy and the Fed’s current policy is more aggressive in stimulus terms than any seen in the past. Long-term, the Fed is targeting an inflation rate of two percent.

Speculation continues unabated as to when the Fed will start reducing its fiscal asset purchases with the US economy continuing to show improvement.
Germany’s trade surplus narrowed to €14.1 billion in May from €17.5 billion in April, according to data released by Destatis at 07:00 BST today. Analysts had been expecting the surplus to remain at €17.5 billion. And the German current account surplus narrowed to €11.2 billion in May, from €16.7 billion in April.

Also in Germany, exports decreased by 2.4 percent in May, against 1.4 percent growth in April and below expectations for -0.4 percent. Imports rose by 1.7 percent, following a prior 1.2 percent increase and above forecasts of 0.5 percent growth.
Since these updates, the euro has risen to 1.2838.
German industrial production data for May will be released at 11:00 BST.

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