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Euro Zone M3 Money Supply Actual 4.9%, Expected 4.5%, Previous 5.0% (Revised from 5.1%)

Release Explanation: Measurement of the value of cash, currency and cash assets held by the public. Monetary policy controls the supply and cost of money and credit. “A central bank will increase the supply of money and decrease the cost of borrowing to stimulate an economy and vice versa to slow down an economy. While measuring the cost of borrowing is fairly easy (yield on Treasury Bonds), measuring the money supply can be a more daunting task,” TheLFB-Forex.com Trade Team said.

TheLFB-Forex.com Trade Desk Thoughts: The Euro zone M3 number hit the wires at 4.9%, higher than what analysts had previously estimated, but still lower than March’s number. The number for the month of March was revised to 5.0%, slightly lower than the initial release.

“The report shows some structural changes happened to April’s money supply. M1 was released at 8.4% in April, up from 5.9% in March, which denotes the population’s preference for liquidity, rather than deposits. M1 measures the liquid assets of the economy, currency in circulation and other forms of assets that can be easily converted to cash,” TheLFB-Forex.com Trade Team commented. 

”The Euro area M3 was expanding at a very strong pace in the last few quarters, but it seems now the pace of growth is starting to slow. The number of Private Loans in the Euro-zone tumbled to 2.4% from one year earlier, also under the forecast number, reflecting the tough credit conditions,” TheLFB-Forex.com Trade Team noted

Forex Technical Reaction: The euro rose as much as 80 pips during the early part of the Asian session, but during the European session the euro traded side-ways just below TheLFB R1 (1.4015)

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