After posting two losing sessions, EUR/USD is steady in Thursday trading. Currently, the pair is trading at 1.1391, down 0.05% on the day. On the release front, the eurozone releases CPI, which should be treated as a market-mover. In the U.S, we’ll get a look at unemployment claims and the Philly Fed Manufacturing Index.
With the eurozone struggling, there are plenty of headaches for ECB policymakers, and Mario Draghi shared some of his concerns on Tuesday, at a plenary session on the ECB annual report. Draghi highlighted Brexit and the U.S-China trade war as significant concerns and noted that eurozone economic conditions have been weaker than expected, adding that the eurozone was undergoing a slowdown but was not heading into recession. The ECB holds its next policy meeting on January 24, with no change in monetary policy expected.
Risk appetite has improved in January, but a weaker Chinese economy could spook investors. On Monday, China released unexpectedly soft data, with exports down 4.4 percent from a year earlier and imports plunging 7.6 percent. The slowdown in China has taken a toll on corporate profits, with Apple and Jaguar Land Rover posting revenue warnings. Further signs of a slowdown from the world’s second largest economy could raise risk apprehension and boost the U.S dollar against its major rivals, including the euro.