Ella 
It’s the end of an uneventful week, but trading had been uneventful leading up to Thursday. After spending most of the week EUR/USD hovering in a tight range above the 1.0700 threshold, the US dollar (USD) finally gave up and extended losses heading into the weekly close.
In the absence of major catalysts, market participants reacted to the United States (US) weekly jobs report. Initial jobless claims jumped to a seasonally adjusted 231,000 in the week ended May 3, the highest since November 2023 and up 22,000 from the last revised level. The four-week moving average rose to 215,000, all pointing to a slowdown in the labor market and rekindling hopes that the Federal Reserve (FED) may speed up rate cuts. Stocks rallied following the news, extending gains on the final trading day of the week to the detriment of the dollar.
On Friday, the United States released its preliminary consumer confidence index for May, measured by the University of Michigan. U.S. consumer confidence plummeted to 67.4 in May from 77.2 in April. The current conditions index fell to 68.8 from 79 the previous month. More worryingly, 1-year inflation expectations rose to 3.5% from 3.2% previously, and 5-year inflation expectations rose to 3.1% from 3.0%.
Beyond that, data is scarce. The euro failed to benefit from encouraging growth data. Hamburg Commerzbank (HCOB) released its final estimate of the Purchasing Managers Index (PMI) for April, with most of the data revised upwards. The final Eurozone services PMI was confirmed at 53.3, with the composite index at 51.7, indicating expansion at the start of the second quarter. The euro zone also reported a 0.4% decline in the producer price index (PPI) on the month and 7.8% on the year. The monthly data was slightly higher than expected, but regardless, the negative result came as a relief to those worried about inflationary pressures. Finally, EU retail sales rose 0.8% in March, beating expectations.
