The European currency managed to regain its positions paired with the US dollar by the end of the North American session after rumors that the European Central Bank will discuss the curtailment of the quantitative easing program at its next meeting.
It is important to note that initially, in the plans of the ECB, there was a complete curtailment of the asset redemption program in early autumn of this year. However, due to a very weak "start" of the economy, and then the political crisis in Italy and Spain, many experts, as well as ECB representatives, started talking about the need to analyze new economic data for making an important decision on the complete curtailment of the asset repurchase program.
The US dollar enjoyed weak support from buyers even against the background of good fundamental statistics, which once again speaks about the revision of the market's attitude towards risky assets. We discussed about this in more detail earlier this week after the release of Friday's data on the US labor market.
According to the report of the Institute of Supply Management, the index of the non-manufacturing sphere in the US for the month of May this year rose sharply. So, the index of supply managers PMI for the non-manufacturing sphere in May rose to 58.6 points, while economists expected that the index in May will be 57.6 points. It is important to note that a value above 50 points indicates an increase in activity.
The index of supply managers for the service sector in May also showed steady growth compared to the previous month. According to the IHS Markit report, the index rose to 56.8 points.
The composite index of supply managers PMI, which consists of production and services, in May 2018 increased to 56.6 points.
All this again shows that the US economy continues to gain momentum, which will support the US dollar in the medium term.
The Australian dollar rose sharply against the US dollar after it became known that the Australian economy showed strong growth in the first quarter of this year.
According to the report, Australia's GDP in the first quarter of this year increased by 1.0% compared with the previous quarter. Compared to the same period in 2017, the economy grew by 3.1%. Economists forecast quarterly GDP growth in the first quarter at 0.9% and an annual growth of 2.9%.
As noted in the report, the growth was due to an increase in exports, as well as a significant increase in profits of Australian companies.
The material has been provided by InstaForex Company - www.instaforex.com