The European currency resumed its downtrend after the release of weak data on inflation in Germany, which once again slowed, increasingly distorting the plans of the European Central Bank to curtail the asset repurchase program.
Given that the German economy is the flagship for the euro area, the ECB leadership at the next meeting can signal on the need to preserve economic stimulus measures.
According to the report of the Federal Bureau of Statistics Destatis, inflation in Germany in April 2018 declined. This happened directly because of a slowdown in the growth of prices for services, while food and energy products showed little growth.
Thus, the consumer price index in April fell by 0.1% compared to March, and compared to the same period in 2017, it grew only by 1.4% against 1.5% in March. The data fully coincided with the forecasts of economists. From this we can conclude that to the level of the European Central Bank, which is slightly less than 2%, it is still quite far.
Bank lending to companies and households in the euro area did not support the European currency, even though in March of this year it increased compared to February, which should positively affect the growth of the economy of the monetary union.
According to the ECB, lending to non-financial companies in March grew by 3.3% compared to March 2017. Lending to households in March compared with March last year increased by 3.0%.
The growth in personal income and spending by Americans supported demand for the US dollar in the afternoon.
According to the report of the US Department of Commerce, personal spending in the US in March of this year has increased due to the growth of personal incomes, which will certainly support economic growth.
Therefore, personal expenses in March grew by 0.4% compared to the previous month, which fully coincided with the forecasts of economists.
Personal incomes of Americans also increased, but by 0.3% compared to the previous month, while economists had forecasted an increase in income by 0.4%. An important point is the fact that consumers began to postpone less. The share of personal savings in March was 3.1% of revenues compared to 3.3%.
The index of prices for personal consumption expenditure in March grew by 2% compared to the same period in 2017. The base PCE index, which does not take into account the volatile categories, increased by 0.2% compared to February.