Forex Daily Recap – EUR/USD Suffered Massive Pullback Following Italy’s Threat to Violate EU Fiscal Rules

USD/CNY

The Yuan pair uplifted 0.13% in the early Asian trading session after the release of weak April YoY reports. The Retail Sales reported near 7.2% over 8.6% estimates. Industrial Production came around 1.1% lower than the market expectation of 6.5%. Laterwards, the USD/CNY pair rose from 6.8647 levels and reached near 6.8850 levels on Greenback upliftment. The US Index had arisen over positive news around US-Sino trade talks. Reports revealed that the US Trade Representative plans to visit Beijing to have further discussions over trade settlement. However, the then gains got eaten up in the later session amid lower-than-expected US April YoY Retail Sales data. The Sales figures got reported as 0.0% over the 0.4% expectation. This weak US data drove the plunge in the pair, making it drop to 6.8754 levels.

EUR/USD

The Euro pair lost the ground second day in a row mostly on Italy’s threat to violate EU Fiscal rules. Matteo Salvini, Leader of the right-wing League party of Italy, proclaimed that the Government might soon increase its debt levels. He threatened to raise the debt levels to 140% of GDP over the EU debt standards of 3% of GDP. Such a violation of the EU Fiscal rules can pressurize the Euro currency leading to a massive plunge.

In the morning session, numerous Eurozone and German events got recorded. Most of them came out in-line with the market expectation, thereby allowing the Fiber to remain silent. The Q1 YoY GDP for Eurozone reported as 1.2%. However, the German Q1 YoY GDP figure came out 0.1% lower than the consensus estimates of 0.7%. The EUR/USD pair had touched the lowest point on the day near 1.1180 levels. The trend reversed laterwards on plunging Greenback and Trump’s comments on postponing car tariff duties. The Green Money had fallen over poor US April Retail Sales figures. Also, the President mentioned that he would delay confirming tariff on cars and its ancillaries by around six months. This news provided an extra boost to the European auto industry, thereby uplifting the Fiber.

USD/CAD

The Loonie began the day with a ten pips upliftment on the backdrop of easing trade tensions. There was a pretty decent performance until the European session. Quite a few significant USD and CAD impacting events got released at around 12:30 GMT. US April Retail Sales figures reported below the market expectation.

On the other hand, the BoC CPI Core numbers came out bearish. The actual figures recorded near 1.5% to the consensus estimates of 1.8%. This weaker Canadian April CPI lowered the intensity of the pullback. Anyhow, the USD/CAD pair lost around 60 pips post the release of the pair-specific events. Meanwhile, Crude prices kept fluctuating to various global cues. EIA reported huge crude inventory of around 5.431 million, making the commodity plunge. This fall in the crude prices helped in the recovery of the Loonie later the day.

US Dollar Index

During the Asian trading session, the Greenback remained pretty silent hovering near 97.50 levels. The early gains got captured following the fall in its biggest rival – EUR/USD pair. The Index had marked the day’s high near 97.70 levels in the middle of the day. However, the earned gains got evaporated following some sparse US reports. The April Retail Sales Control Group came out 0.4% lower than expectations. And, the MoM Retail Sales reported a negative 0.2% over positive 0.2% anticipation. The US Dollar Index was trading near 97.54 levels at 17:02 GMT.