New stress for USD. Overview for 28.04.2023

EURUSD on Friday remains neutral after receiving new alarming signals from the US economy. The current quote is 1.1030.

The US GDP in the first quarter of 2023 grew by just 1.1% instead of the forecast 2.0% after growing by 2.6% previously. The economic growth turned out twice as worse as expected.

In the components, it is seen that consumer expenses in January-March increased by 3.7%, which is the high since the spring of 2021. State expenses rose by 4.7%, which is also the high since 2021.

However, private investments betrayed the economy by crashing to the lows since the pandemic times. Inventory and equipment investments also dropped.

So, it is obvious that consumer expenses remain really intense, while the inflation pressure also carries on. This means, the Federal Reserve System will have to lift the interest rate by 25 base points in May. Today a crucial Core PCE report is expected. This is an inflation component that the Fed keeps a close eye on.