French figures weigh on euro

The euro is off versus the US dollar after France revealed weaker-than-expected consumer spending figures.

The EUR/USD is trading at $1.3719, down 0.15%, after France reported an increase in consumer spending of 0.1% in February; the consensus was for an increase of 1%. At the start of the week France revealed stronger-than-expected services and manufacturing reports, but French economic indicators over the past two months have been poor. The country may be the second biggest economy in the eurozone but the gap between France and Germany is widening.

As Brenda Kelly stated, the euro doesn’t have the legs to head back towards the $1.4 level and now that we are below the support level of $1.3750, it does not look good for the euro.

The situation in Ukraine is still bubbling away in the background and the eurozone remains heavily dependent on Russian natural gas. If tensions heighten between Moscow and the west, we could see EUR/USD head towards the $1.3640 mark.

Spot FX EUR/USD chart

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