EUR boosted by US CPI report
|The common currency made a march towards the $1.17 level at the end of the London trading session on Tuesday, as investors ditched the dollar following the release of the US CPI report, which should pave the way for a narrowing in US-Euro Area rate differentials in the coming months.
The August ZEW economic sentiment survey, out yesterday, was a slight disappointment (25.1 vs. 28.1 consensus), but markets were not overly bothered and considering the downside growth risks posed by US tariffs, this drop off is not particularly concerning.
We now look ahead to a handful of macroeconomic data releases later in the week, notably Thursday’s revised second quarter GDP figures and June industrial production.
That said, August is a typically quiet month in financial markets in much of Europe, not least given the lack of communication from European Central Bank officials.
Headlines out of the Trump-Putin talks on Friday could shift EUR/USD later in the week, although this will probably be more of a “feel-out” meeting, and any steps towards a truce or ceasefire seems unlikely.
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