The dollar has continued to gain ground against the Euro on Tuesday and is also up versus the pound sterling. Investors had largely anticipated that a new round of elections would need to take place in Greece, however the news sparked concerns over Italy and Spain. Rating agency Moody's Investors Service downgraded 26 Italian banks on Monday. Gross domestic product results from the Eurozone managed to narrowly avoid recession in the first quarter, due to the robust results from Germany.
Meanwhile, the slew of economic data released by the U.S. on Tuesday was largely received positively. The jumps in homebuilder confidence and in the New York manufacturing data were particularly strong. Investors will also be watching for the results of the meeting between newly elected French president Francois Hollande and German Chancellor Angela Merkel later today.
A final round of talks among leaders in Athens has failed to produce a coalition government. As a result, the country will now need to hold a new round of elections. Meanwhile, Eurogroup President Jean-Claude Juncker dismissed talks on Greece's exit from Eurozone as "propaganda" and said there was "absolutely no discussion" on Greece during Monday's euro area finance ministers' meeting.
The dollar has been rising steadily versus the Euro since the beginning of May. In that time the U.S. currency has climbed from $1.3283, to a 4-month high of $1.2752 on Tuesday.
The German economy expanded more than expected in the first quarter of 2012, data released by the Federal Statistical Office showed Tuesday. Gross domestic product rose 0.5 percent from the prior quarter, when it fell 0.2 percent. Economists had expected only 0.1 percent growth for the first quarter.
The French economy stagnated in the first quarter of 2012 after a modest growth in the fourth quarter of 2011, the statistical office Insee said Tuesday. The gross domestic product recorded no change during the first three months of the year in line with economists' expectations.
The Eurozone economy avoided a recession in the first quarter, flash data from Eurostat showed Tuesday. Gross domestic product for the 17-nation bloc remained flat sequentially after shrinking 0.3 percent in the fourth quarter. Economists were forecasting a 0.2 percent contraction for the first quarter.
Germany's economic sentiment fell more than expected in May, a survey by Mannheim-based Centre for European Economic Research (ZEW) revealed Tuesday. The indicator of economic sentiment fell to 10.8 in May from 23.4 in April. Economists had expected the index to fall to 19.
The greenback has also been gaining against the pound sterling since the beginning of the month. The currency has bounced back from a 7-month low of $1.6279 in late April, to nearly a one-month high of $1.6010 on Tuesday.
The buck has also bounced back from Monday morning's losses versus the Japanese Yen and has risen to a week and a half high of Y80.266 on Tuesday. Japan's consumer confidence dropped unexpectedly in April, reflecting deterioration in willingness to buy and assessment of current overall livelihood, survey results from the Cabinet Office showed Tuesday. The consumer sentiment index dipped to 40 from 40.3 a month ago. Economists were forecasting the index to rise to 40.8.
Retail sales in the U.S. saw a modest increase in the month of April, according to a report released by the Commerce Department on Tuesday, with the increase in sales matching economist estimates. The report showed that retail sales edged up by 0.1 percent in April following a revised 0.7 percent increase in March. Economists had expected sales to increase by 0.1 percent compared to the 0.8 percent growth originally reported for the previous month.
Inflation remained well under control in April, new government figures showed on Tuesday. After a couple months of relatively strong readings, consumer prices stagnated last month, returning to the tame levels seen late last year and the start of this year. The Department of Labor revealed that consumer prices were flat in April compared to the previous month. This matched the expectation of economists, who had predicted no change.
Activity in the New York manufacturing sector has expanded at an accelerated rate in the month of May, according to a report released by the Federal Reserve Bank of New York on Tuesday, with the index of activity in the sector rising by much more than expected. The New York Fed said its general business conditions index jumped to 17.1 in May from 6.6 in April, with a positive reading indicating an increase in regional manufacturing activity. Economists had expected the index to show a more modest increase to a reading of 10.0.
Business inventories in the U.S. rose by slightly less than expected in the month of March, according to a report released by the Commerce Department on Tuesday, although the report also showed a notable increase in business sales. The report showed that business inventories rose by 0.3 percent in March following a 0.6 percent increase in February. Economists had expected inventories to increase by about 0.4 percent.
Homebuilder confidence in the U.S. has seen a significant improvement in the month of May, the National Association of Home Builders revealed in a report on Tuesday, with the index of homebuilder confidence reaching a five-year high. The report showed that the NAHB/Wells Fargo Housing Market Index jumped to 29 in May from a downwardly revised 24 in April. Economists had expected the index to edge up to 26 from the 25 originally reported for the previous month.
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Forex News
June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.