Euro Forex Market Improves With US Data to Come

• Euro Recovers as ECB Turns Tough 
• US Retail Sales Numbers in Focus
• Wall Street Starts Day Strongly

The Euro forex market has managed to gain some much-needed traction against the Dollar at the beginning of this week. This recovery of sorts has been brought about by improving market mood but also the fact that the ECB is talking tougher on fighting inflation. This could move ECB policy more in line with the Fed. US retail sales data will be the key mover of the day for traders while stocks have started the day strongly after a quiet Monday.

Euro Attempts to Bounce Back

The Euro gained ground on Monday and this has continued into today with the common currency approaching 1.05 against the Dollar. Those forex trading the currency has seen little in the way of positive momentum recently, though this could be building. Eyes will be on ECB President Christine Lagarde as she speaks today. The focus will likely be on how she will address the continuing issue of inflation in the region. 

Some of the positive forces behind the move upward in the Euro have been a tougher line that policymakers appear to be taking on fiscal policy. The general consensus is that the Central Bank will move more quickly toward a more hawkish position bringing it more in line with the Federal Reserve. Analysts now expect a 25bps interest rate rise by the end of September.

US Retail Sales Key Figures of Day

All eyes will be focused on the US Retail Sales data set to be released later today. This number is expected to increase at a more stable rate with a 0.7% gain forecast for the month of April. This is up slightly from the March number of 0.5% but would seem to already be priced into the market. Any deviation from this number could surely cause market movement with inflationary pressuring being such a sensitive topic. 

Also due for release today is industrial production data from the US while Federal Reserve Chair Jerome Powell will deliver a speech that is set to be watched closely by traders and forex brokers alike for any changes from the recently more hawkish Powell.

Stocks Set to Continue Recovery

Monday was another relatively choppy day on Wall Street with the major averages falling again in what has been a period defined by turbulence. The markets have moved in a more positive direction today approaching the opening bell as traders try to take advantage of some lower prices. 

The Dow Jones has added 400 points in early trading while the S&P 500 and Nasdaq are both up as well, the latter by more than 2%. Both the DJIA and Nasdaq are trying to snap multi-week losing runs with losses mounting since the turn of the year. A number of high-profile stocks have jumped including Citigroup which popped 5% after news of Warren Buffett increasing his stake.