Home Daily Commentaries Euro awaits German CPI for clearer direction

Euro awaits German CPI for clearer direction

Daily Currency Update

The Euro finds support towards the 0.86 range against pound sterling, as investors factor the German CPI data due for release and how this may play a role with next interest rate decision from the European Central Bank.

The softer than expected economic data from the Eurozone could suggest the ECB may to pause interest rates at its next meeting on September 14th. The September’s German Gfk Consumer Confidence Survey on Tuesday came in at -25.5 versus -24.6 prior and worse than the expectation of -24.3. Additionally, the Eurozone money supply fell for the first time since 2010 as private sector lending slowed and deposits fell.

This week's publication of Eurozone inflation figures and the ECB's updated economic projections could signal about future monetary policy and give a clear direction in the Euro. However, the Pound may likely feel support if the Bank of England decide to hike interest rates again in September, currently the World Interest Rates Probabilities tool suggests markets anticipate 75% odds.

Key Movers

Investors await the annual and monthly CPI figures which are expected to rise 6% and 0.3%, respectively. Also, the Eurozone CPI, Retail Sales, and the ECB Meeting Minutes that are due to be released later this week.

Expected Ranges

  • GBP/USD: 1.2618 - 1.2649 ▼
  • GBP/EUR: 1.1613 - 1.1630 ▼
  • GBP/AUD: 1.9482 - 1.9635 ▼
  • EUR/USD: 1.0856 - 1.0886 ▲