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Euro/Dollar Could Go to 1.15 Due to Weak US Statistics

According to data published yesterday, US April retail sales are unchanged in relation to those of March. This goes against the expected MOM rise of 0.3%. March’s MOM rise totaled 1.1%. The indicator without taking into account sales of cars also increased less than expected, seeing a rise of just 0.1%.

The euro/dollar pair reached the 1.1382 level. Weak American statistics are undermining the dollar’s position and, in case of further disappointment with regards to manufacturing prices and unemployment benefits in the US, the pair could test the 1.15 level. In any case, at the moment we’re talking about a correctional movement on the dollar.

Yesterday the US Energy Information Administration (EIA) published information saying that the oil reserves in the US had fallen by 2.191 million barrels and thereby coinciding with the figures from the API which stated that reserves had fallen by 2 million.

Furthermore, oil quotes fell slightly on news of data published on Wednesday by the International Energy Agency (IEA) which made clear that there is a continued excess of supply for oil. So the reduction in the US’ reserves is not yet so much as was their previous buildup of reserves in Q1 of this year. In addition, there are signs that the reserves may increase. According to data from the IEA, supply in the world of oil in April increased by 3.2 million barrels a day. Although the rate of growth in extraction in the US is lessening, in other countries it is rising.

The next thing that is to be at the centre of attention is OPEC’s planned meeting in June. Market participants will wait for signals related to the cartel’s extraction amount and its market strategy. Judging by the most recent of announcements from the representatives of OPEC’s member countries, namely Saudi Arabia, there are no plans to drop the quotas just yet since their main focus is to hold their market share.

Today a barrel of Brent Crude is assessed by the market as bearing the worth of 61.71 dollars.

Today it’s worth having a look at the US’ Manufacturing price index and weekly data on unemployment benefit applications. Other than that, the ECB’s head, Mario Draghi, is due to give a speech.

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