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The euro fell against the dollar to its lowest level since April 4, after the data provided by Thomson-Reuters and the Michigan Institute showed that in May, U.S. consumers are feeling much more optimistic about the economy than last month. According to provisional data, in May consumer sentiment index rose to 83.7, compared with a reading at 76.4 the previous month. Note that according to the average estimates of experts, the index had to rise to the level of 77.9. In addition, it was reported that the current conditions index rose to 97.5 from 89.9 reported last month, and the expectations index advanced to 74.8 from 67.8. It should be noted that inflation expectations one year ahead remained unchanged in the month of May - at 3.1%, while inflation expectations for the next 5-10 years declined to 2.8% from 2.9%.
Previously, the pressure on the European single currency was evidence that in March the eurozone construction output continued to decline, registering with the fifth consecutive monthly decline. According to the report, a monthly basis, the volume of construction in April fell 1.7 percent, which followed a decline of 0.3 percent in February, while the year-on-year decline was 7.9%, compared with growth of 1.7% in March. Construction of buildings and civil engineering fell by 1.4% and 2.4%, respectively. We also add that in the first quarter as a whole, construction output fell by 3.0%, which was significantly greater than the decline of 1.8% recorded in the last three months of last year. At the same time, the data showed that the annualized volumes declined in ten Member States and improved in four. The largest annual decline was registered in Slovenia, the Czech Republic and Poland. Meanwhile, Spain and Hungary reported the highest growth rates. Statistical Office reported that the decline in construction was distributed across the euro zone (the volume of construction in the EU-27 decreased by 1.1% on a monthly basis, and fell by 7.2% per annum), and even in Germany (by 3.1% ), which narrowly avoided slipping into recession in the first quarter. In monthly terms, the largest decline in construction was recorded in Portugal (10.7%), which reflects the current austerity as to how the country is struggling to reduce the budget deficit.
The Canadian dollar fell to a two-month low against the U.S. dollar after the annual inflation rate in April fell to its lowest level in more than three years, reinforcing expectations of lower interest rates. The Canadian dollar fell against all of its 16 most-traded currencies after the consumer price index rose 0.4% in April, in annual terms, and compared with 1% growth in the previous month. This is the slowest growth since October 2009.
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