The Euro is attempting to crawl higher on Friday, after declining for the past two sessions. The Euro US Dollar exchange rate settled -0.12% lower at US$1.0805 on Thursday.
At 08:15 UTC, EUR/USD is trading +0.05% at US$1.0812 on broad US Dollar weakness and ahead of the German GDP release.
German GDP -2.2% Expected
Analysts are expecting the German economy to have contracted -2.2% quarter on quarter in the first three months of the year. This data would include 8 days of the German coronavirus lockdown. However, China is Germany largest trading partner and China experienced a deep downturn in the first two months of the year owing to the coronavirus outbreak.
The worst is yet to come with analysts expecting a -10% contraction in the German economy in the second quarter.
The report comes as investors continue to watch the Germany slowing easing lockdown measures to reopen its economy. Concerns over a second wave of coronavirus infections is keeping investors cautious.
The Eurozone will also release GDP data today. Analysts are expecting a -3.8% contraction quarter on quarter. A worse than forecast reading could unnerve investors.
US Retail Sales -12% In April Expected
The US Dollar is trending broadly lower versus its major peers in a broad risk on climate. Bright spot in Chinese data released overnight has overshadowed President Trump threatening to sever the relationship with China. His comments come as he continues in his efforts to pin the blame for the coronavirus outbreak on China.
Chinese Industrial data beat analysts’ expectations increasing 3.9% year on year in April against 1.5% forecast in a sign that progress is being made in restarting heavy industry. Chinese retail sales missed forecasts, declining -7.5% yoy in April. However, this was a sharp increase from the -15% decline the previous month.
Looking ahead investors will focus on US retail sales. Analysts are expecting retail sales to drop -12% month on month in April, down from -8.7% in March. Whilst this is a horrendous figure, retail sales are expected to pick up going forwards as the US gradually reopens its economy.
The data will come after figures yesterday revealed that an additional 2.98 million Americans filed for unemployment benefits in the week ending 8th May. 36 million Americans have filed for initial jobless claims over the past 2 months.
