Even though the Euro is stronger today, it is still stuck in its week long trading range economic data was mixed once again.
The German ILO unemployment rate dipped and Eurozone consumer confidence increased, but at the same time the number of unemployed people increased in Germany. This data does little to clarify the air on what the European Central Bank will do beyond June which is capping gains in the Euro. Traders are holding back from selling the Euro aggressively on the expectation that the ECB will be increasing rates next month but they are also holding back from buying it ahead of German retail sales and PMI manufacturing numbers tomorrow. The retail PMI numbers were very weak and this suggests that we could also see softer consumer spending in Germany. Manufacturing PMI has a greater chance of disappointing as well with corporate profitability likely to be impacted by the strength of the Euro. Meanwhile over in Switzerland, GDP growth in the first quarter was the strongest in seven quarters. This is a testament to the overall health of the Swiss economy and supports the Swiss National Bank?s desire to raise interest rates. The government has been very unhappy with the weakness of the Franc and the growth data indicates that the economy will be able to weather tighter monetary policy.