Single currency to retest $1.1 barrier Market awaiting strong evidence about European interest rate cuts
The euro fell in the European market on Thursday against a basket of major and minor currencies, continuing its losses for the second consecutive day against the US dollar, moving away from the highest level in 13 months, as corrections and profit-taking continued, and after data showed a slowdown that exceeded expectations for inflation in Spain during August, waiting for the release of inflation data in Germany later today.
Spanish and German inflation data serve as a leading indicator of what major inflation data for all of Europe due on Friday will be, which will provide strong clues about possible European interest rate cuts before the end of this year.
Quote • Euro exchange rate today: The euro fell against the dollar by 0.3% to (1.1088 dollars), from the opening price of trading at (1.1119 dollars), and recorded the highest level at (1.1140 dollars).
The euro ended Wednesday’s trading down 0.6% against the dollar, the second loss in the last three days, due to corrections and profit-taking from a 13-month high of $1.1202.
Inflation in Spain has just released inflation data for Spain, where the overall consumer price index recorded a rise of 2.2% in August from a rise of 2.8% in July, below market expectations of a rise of 2.4%.
European interest rates futures rose for the prospect of the European Central Bank cutting interest rates by about 25 basis points in September from 45% to 50%, pending more economic data on inflation, growth and unemployment.
Inflation in GermanyTo re-price those possibilities, continuators await the release of important data on Germany’s key inflation levels for August, just a day before the release of headline inflation data for the entire eurozone.
These data will show the extent to which inflationary pressures have reached the ECB’s monetary policymakers, the easing of those pressures means that the likelihood of a European interest rate cut in September is higher and vice versa
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Expectations about the performance of the euro • We expect here in the site ‘FX News Today’: The euro will continue to move in negative territory within the downward correction cycle in the intraday against the US dollar pending the release of German inflation data, which if it comes below market expectations, will exacerbate the losses of the euro against a basket of global currencies.
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