Euro Range Tightens Ahead of GDP Numbers

Even though the Euro has extended its Friday gains thanks to slightly stronger than expected industrial production numbers, the rally was modest at best. In fact, the EUR/USD has been confined to a 35 pip trading range for the past 24 hours. Tomorrow?s batch of US and Eurozone economic data should take the EUR/USD out of its range.

From the Eurozone, we are expecting first quarter GDP. Growth is expected to slow from an annualized pace of 3.30 percent to 3.00 percent. Most of this deterioration is predicted to come from German growth. French growth is actually expected to accelerate, while German growth is forecasted to drop from 3.5 to 3.3 percent. These estimates may be a bit too pessimistic since we have only seen the strength of the Euro have a limited impact on Eurozone growth. European data should lead to some early activity, but the marquee events tomorrow are in the US, so any surprises there could negate the strength or weakness in the Eurozone. Meanwhile Swiss retail sales are due for release. Annualized consumer spending is expected to slow from 4.5 percent to 4.0 percent.