The Euro came under further selling pressure on the combination of broad dollar strength and moderate comments from ECB officials.
ECB member Tumpel-Gugerell said this morning that Trichet’s “no bias” is shared by the entire Governing Council. In other words, no one in the monetary policy committee is committed to another rate hike, especially not with oil prices falling as much as they did today. The final figures for first quarter GDP are due for release along with the German trade and current account balances. Given the sharp drop in industrial production and the decline in export orders, the trade surplus may have shrank by more than expected in the month of May. Another negative surprise could send the EUR/USD below 1.56, which would open up the door for a move down to 1.55.