IForex Daily : May 06, 2014

 | May 06, 2015 05:24AM ET

On Tuesday, the U.S saw a soft batch of economic data. The U.S. trade deficit in March increased to a six year high, as labor disputes at West Coast ports and recent strength in the dollar weighed heavily on foreign trade. In its monthly report, the U.S. Department of Commerce said the nation's trade deficit rose sharply by 43.1% to $51.4 billion, its highest level since Fall, 2008. The percentage increase was also the highest since December, 1996. Following the release gold reached a weekly high after the release. March exports rose modestly to $187.8 billion, while imports soared by more than $17 billion to $239.2 billion for the month. The increase of the trade deficit has created worries of further economic slowdown. Japanese markets are closed again today as they mark Constitution Day public holiday, and the final day of the Golden Week. Currency traders await for Friday's jobs release from the U.S but prior to that a general election on Thursday to elect the 56th Parliament of the United Kingdom will be in focus.

EUR/USD

The euro rose slightly against the U.S. dollar on Tuesday pausing its recent drop, as the U.S. trade deficit in March soared to its highest level in more than six years. March exports rose modestly to $187.8 billion, while imports skyrocketed by more than $17 billion to $239.2 billion for the month adding strong pressure on the dollar. Concerns related to the Greek debt crisis and the timing of an interest rate hike by the Federal Reserve continue to add pressure on the EUR/USD pair which rose just above 1.12 once more, after dropping below 1.1100 on Tuesday. In Brussels, talks between Greece and its euro zone creditors were put on hold until Athens agreed to further reform measures deemed necessary to unlock critical aid. According to European commissioner for Economic Affairs there is hope that a deal can be reached at the next euro group meeting on May 11. For today, the euro zone is to publish revised data on service sector activity and a report on retail sales. The U.S. is to release its monthly ADP nonfarm payrolls report and later in the day Fed Chair Janet Yellen is to speak at an event in Washington DC.