Published on 10.11.2021 11:31

The Euro has failed to capitalize on a strong round of inflation figures released earlier today from Germany which shows that economic data out of the US is currently the main driver for the EUR/USD currency pair and that means all eyes will be on the release of consumer price index figures from America later today.

|The latest CPI figures from Germany hit the market at 4.6%, which is exactly what analysts had predicted and follows on from last month’s inflation figures from the Eurozone which jumped above 4% last month, more than twice the ECB’s 2% target. Despite the high inflation figures, the ECB’s boss Christine Lagarde   has pushed back on calls for tighter policy, arguing transitory forces are behind the rise and inflation will fall below its target in the years to come.

It seems not all members of the ECB agree with Lagarde’s assumptions and believe there should be measure put in place to deal with inflation figure should they not subside.

“We should not be complacent about upside risks to inflation,” governing Council member Klaas Knot told a UBS conference on Tuesday. 

“We cannot make long-lasting unconditional commitments that might end up being incompatible with how the inflation outlook develops.” He added.

As mentioned earlier, the key to the EUR/USD fortunes will be the release of consumer price index figures later from the US and only a round of disappointing data will give the Euro a chance to break through the strong resistance level of $1.1613, something it has failed to do over the past 8 trading days.

If the CPI figures come in above expectations the US federal Reserve will no longer be able to ignore the fact that rate rises will have to be forthcoming, and the Euro is likely to see a new yearly low.


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