The currency has been dogged by a dovish Reserve Bank of Australia but it rose above $0.72 for the first time since Feb. 21, after data showed China’s economy grew 6.4 percent in the first quarter.
The U.S. dollar, often a safe haven, sagged against the euro after the Chinese data eased concerns about a global economic slowdown.
The dollar index against a basket of six major currencies dipped 0.2 percent to 96.846.
The euro rose 0.4 percent to $1.1300, paring the previous day’s losses.
The single currency came under pressure on Tuesday after Reuters quoted four sources with direct knowledge of discussions as saying several European Central Bank policymakers think the ECB’s economic projections are too optimistic, as economic weakness in China and trade tensions lingers.
· GBP/USD attempts a recovery ahead of UK inflation
GBP/USD is trading in the mid 1.3050s, up from the lows. Concerns about the stalled talks between the government and the opposition have been shrugged off. UK CPI is projected to rise.
An upward sloping support-line stretched since February 14, at 1.3030, restricts the pair’s near-term declines, a break of which can highlight 200-day simple moving average (SMA) level of 1.2970 and 1.2950 including 100-day SMA.
Alternatively, 50-day SMA and a five-week long descending trend-line around 1.3100 – 1.3105 seems a tough resistance on the upside. In a case where prices rally beyond 1.3105, 1.3130 and 1.3200 may come back on the chart.
· Goldman Sachs Chief Executive David Solomon said Wednesday that the chances of the U.S. economy soon entering a recession are lower now than they were earlier this year.
“I don’t see any data in any way, shape or form that leads me to believe that that chance is accelerating at the moment,” Solomon told CNBC’s Tanvir Gill in Ningbo, China.
Central banks around the world have also become “much more accommodative,” the Goldman Sachs exec said, adding that such a development “bodes well for continuing the expansion.”
· China on Wednesday released a slew of official economic data that beat expectations, including the widely anticipated gross domestic product figure.
Beijing said its economy expanded by 6.4 percent year-on-year in the first quarter of 2019, topping the 6.3 percent that analysts polled by Reuters had expected. China’s economy grew by 6.4 percent year-on-year in the fourth quarter of last year, and 6.8 percent in the first quarter of 2018.
The Asian economic giant also released other economic indicators:
- Industrial production jumped 8.5 percent year-on-year in March — surging past the 5.9 percent estimated by Reuters to register the fastest growth since July 2014.
- Retail sales for March grew by 8.7 percent year-on-year, beating Reuters’ projection of 8.4 percent.
- Fixed asset investment in the first quarter increased by 6.3 percent year-on-year, in line with expectations.
On the latest set of official data, analysts attributed the generally better-than-expected performance to measures taken by Beijing to support the economy.
Hu said she expects Chinese authorities to introduce more supportive policies as uncertainties surrounding trade have not gone away. The U.S. and China are currently negotiating a trade deal after putting their tariff fight on hold.
· Italy’s economy showed encouraging signs in the first two months of this year, Economy Minister Giovanni Tria said on Wednesday.
Speaking at a parliamentary hearing, he added that the government’s forecast for economic growth of 0.2 percent this year reflected expectations for a slight recovery in the first half of 2019, followed by a stronger pick-up.
Gross domestic product fell 0.1 percent in the third and fourth quarters of last year, putting the euro zone’s third largest economy into a technical recession.
· Oil prices rose for a second day on Wednesday on signs of strong demand from refineries in China, the world’s second-largest crude user, amid tightening supply as producers curtail output and as oil inventories in the United States fell unexpectedly.
International benchmark Brent crude oil futures rose 29 cents, or 0.4 percent, to $72.01 a barrel by 0657 GMT. Brent gained as much 0.5 percent to 72.10 a barrel, the highest since Nov. 8 and the highest this year.
U.S. West Texas Intermediate (WTI) crude futures were at $64.49 per barrel, up 44 cents, or 0.7 percent from their previous settlement.
· CRUDE OIL TECHNICAL ANALYSIS
Crude oil prices continue to tread water near support-turned-resistance in the 63.59-64.88 area. A break above this and the 66.09-67.03 inflection zone following immediately thereafter opens the door for a test of the $70/bbl figure. Alternatively, turn below support at 60.39 would invalidate the uptrend from December lows, making for a bearish near-term bias. The first subsequent layer of support is in the 57.24-88 region.
Reference: CNBC, Reuters, Investing.com
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