Today is Fri, November 17, 2017 19:12:08 GMT
RSS Follow Us Follow us on Twitter Friend us on Facebook
Contributors Euro Looks to German Inflation Report to Power a Corrective Bounce

Talking Points:

  • Euro May Correct Higher if Augusts’ German CPI Data Tops Expectations
  • US Dollar Slumped on Profit-Taking in Asia, 2Q GDP Revision Eyed Ahead
  • See Economic Releases Directly on Your Charts with the DailyFX News App

The preliminary set of Augusts’ German CPI figures headlines the economic calendar in European hours. The baseline year-on-year inflation rate is expected to remain unchanged at 0.8 percent, matching a four-year low recorded in May.

In broad trend terms, German price-growth data has cautiously improved relative to consensus forecasts over recent months, hinting at the possibility for an upside surprise. Such an outcome may pour cold water on speculation about an imminent expansion of ECB stimulus, sending the Euro higher. The chart setup likewise hints the single currency is preparing to correct higher.

The US Dollar broadly underperformed in overnight trade, sliding as much as 0.2 percent on average against its leading counterparts. The selloff may reflect profit-taking in preparation for the upcoming release of revised second-quarter US GDP figures. The report is expected to see the annualized quarter-on-quarter growth figure revised down to 3.9 percent from the initially-reported 4.0 percent result.

A softer-than-expected print may undermine bets on a relatively sooner move to raise interest rates after the Federal Reserve wraps up QE3 asset purchases in October. Such a possibility after the benchmark unit hit a six-month high earlier this week makes a degree of profit-taking seem reasonable. Indeed, technical positioning warns a near-term top may be in place.

Asia Session
290814a

European Session
290814b

Critical Levels
290814c

Recent posts by DailyFX