When is German prelim CPI and how could it affect EUR/USD?
|German prelim CPI Overview
The German inflation data is up for release later this session at 1200GMT, with the CPI figures expected to drop to -0.1% m/m in May, versus 0.0% reading seen a month ago, while easing to 1.6% annually, compared to the 2.0% result reported in April.
Germany's regional CPIs released earlier today paints a bleak picture of the harmonized German CPI report due to be reported shortly. Brandenburg inflation for the month of May YoY came in at +1.4% versus +1.8% prev. In Hesse, YoY dropped to +1.7%, versus +2.1% prev. Meanwhile, in Bavaria, YoY also slid to +1.4% versus +1.9% last. In Saxony, May inflation YoY came in at +1.6% versus +2.1% prev.
How could affect EUR/USD?
On a positive surprise, we could see the EUR/USD pair regain 1.12 handle. On the flip side, if the readings come in much softer-than expectations, the rate could fall back towards the daily low reached just ahead of 1.11 handle.
Key notes
EUR/USD Forecast: risk sentiment and inflation leading the way
“Attention will center in inflation, Germany will release its May preliminary CPI figures, while the US will unveil its core PCE price index, Fed's favorite inflation measure. In both cases, inflation could determinate next monetary policies' steps, and therefore shake the pair,” Valeria Bednarik, Chief Analyst at FXStreet noted.
About German prelim CPI
The Germany consumer price index released by the Statistisches Bundesamt Deutschland measures the average price change for all goods and services purchased by households for consumption purposes. CPI is the main indicator to measure inflation and changes in purchasing trends. A high reading is positive (or Bullish) for the EUR, while a low reading is negative (or bearish).
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