Euro Area Consumer Confidence Hits One-Year High
- Euro Area Consumer Confidence rises from -17.5 in April to -17.4 in May.
- Inflation remains a serious problem in the EU.
- EUR/USD tries to settle above the 1.0820 level.
On May 22, EU released the flash reading of the Euro Area Consumer Confidence report for May. The report indicated that Euro Area Consumer Confidence improved from -17.5 in April to -17.4 in May, compared to analyst consensus of -16.8.
From a big picture point of view, Euro Area Consumer Confidence continues to rebound from the low of -28.7 which was reached back in September 2022. However, the pace of this rebound is slow, and it is clear that European consumers remain under pressure.
The situation in the European economy is challenging, although it looks that the acute phase of the energy crisis is over as natural gas have settled at levels that were last seen back in 2021. At the same time, the ECB must continue its fight against inflation, which stays at high levels. According to analyst forecasts, Euro Area Inflation Rate is expected to decline from 7% in April to 6.5% in May. The inflation reports will be released on June 1, 2023.
EUR/USD rebounded towards the 1.0820 level after the release of the Euro Area Consumer Confidence report. Trading remains choppy, and it looks that traders are mostly focused on U.S. debt ceiling negotiations. The result of these negotiations will have a major impact on markets, so it’s not surprising to see that traders remain nervous as they wait for the outcome of these talks.
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