German CPI/IPCA Pace Estimates
German inflation rises in all measures during the month of June. The ECB is likely to remain dovish due to stubborn inflation. The euro will continue to be supported. Surprising US GDP data lifts dollar, sending EUR/USD sharply lower moments after releaseThe analysis in this article makes use of graphics patterns and key support and resistance levels For more information visit our complete education library
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German inflation rises in all measures in June
CPI in Germany beat last months 6.2% and the consensus estimate of 6.3% to print at 6.4%, ending the downward trend in headline inflation that has developed throughout the year. The most broadly comparable measure within the eurozone, the IAPC also revealed a warmer month-on-month impression, coming in at 6.8%, which was either in line or slightly above expectations, depending on the source of the survey data used. Either way, the higher impression will only encourage Christine Lagarde and the rest of the governing council as they continue to talk about future rate hikes.
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Today’s German data tends to weigh on the broader EU inflation data due tomorrow, potentially adding a bigger-than-expected impression. As inflation continues to be under discussion this week, after the EU inflation data tomorrow we will have the US PCE data, the Fed’s preferred measure.
Immediate market reaction
The immediate reaction of the euro was rather soft, given that prices had risen in anticipation of the date. 30 minutes later, however, a massive upward revision to the final US GDP figure for the first quarter saw the dollar rise, sending EUR/USD lower.
EUR/USD 5 minute chart
Source: TradingView, powered by Richard Snow
The US data has influenced the intraday trade seen on the daily chart, moving from positive to negative as prices trade below 1.0910 at the time of writing.
EUR/USD Daily Chart
Source: TradingView, powered by Richard Snow
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— Written by Richard Snow for DailyFX.com
Contact and follow Richard on Twitter: @RichardSnowFX
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