Published on 13.10.2022 10:26

The Euro has once is once again sitting in a tight trading range against the US dollar for a 3rd straight day as investors remain wary og taking positions in the Euro/USD currency pair as market participants await crucial inflation figures from the Euro zone and the US which could determine the currency pairs direction until years end.

In yesterday’s trading session, there was hawkish commentary from European Central Bank (ECB) President Christine Lagarde who noted that the that the Governing Council is having discussions on Quantitative Tightening and interest rate is the most appropriate tool in current circumstances, but this bullish speech failed to boost the Euro.

There was also the release of the Fed minutes on and it has been made loud and clear that bringing price stability is the foremost priority of the Fed. Despite a slowdown in the jobs market the Fed is hell bent on continuing to raise rates until inflation is in check. Some policymakers also noted that reaching the targeted Fed funds rate and sticking to it for an uncertain period is critical to contain the mounting price pressures.

Regarding the inflation numbers, First off the mark we will see the latest CPI figures from Germany which are expected to hit the market at steady at 10.9%, unchanged from last month and if analysts are correct, this should lend some support to the Euro, at least until the release of the US inflation figures

The US numbers are expected to come in at by 8.1% YoY, decreasing slightly from the previous 8.3%. Core inflation, on the other hand, is expected to have moved toward its recent multi-decade high of 6.5%.

There is little risk for the greenback with this release should the figures come in below expectations but if there is a surprise to the upside it is likely that the Euro will once again be sold off.


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