The Euro and the US Dollar may find fuel to correct upward in upcoming inflation and industrial production economic data releases.
Euro May Mount a Recovery if May’s Inflation Data is Revised Upward
US Dollar Could Find a Reprieve in Upbeat Industrial Production Print
Yen Rose on Haven Demand, NZ Dollar Gained on RBNZ Bets in Asia
The final revision of May’s Eurozone CPI data set headlines a relatively quiet European economic calendar. The headline year-on-year inflation rate is expected to be confirmed at 0.5 percent, in line with flash estimates. While that puts the pace of price growth at a five-year low, the release’s market-moving potential may be limited absent a meaningful deviation from forecasts considering deflation threats have already produced an expansion of ECB stimulus. It is worth noting that Eurozone inflation data has improved relative to expectations since the beginning of the year, opening the door for a Euro-positive result. In fact, EURJPY technical positioning hints a bounce may be ahead.
Later in the day, the spotlight turns to US economic data, with May’s Industrial Production data on tap. Output is expected to rise 0.5 percent, marking an improvement from a 0.6 percent decline in April. A positive outcome may help trigger a bounce in the US Dollar as markets move to a more neutral setting following last week’s selloff in the run-up to the upcoming FOMC policy meeting. News-flow from the world’s largest economy has broadly improved relative to consensus forecasts since early April but a recent string of disappointing releases took its toll greenback, putting its multi-year uptrend in jeopardy.
The New Zealand Dollar advanced in overnight trade, rising as much as 0.2 percent on average against its leading counterparts. The move tracked a pickup in front-end bond yields, hinting the gains reflected continued follow-through on last week’s hawkish RBNZ policy announcement. The Japanese Yen likewise advanced as the Nikkei 225 stock index traded lower, boosting haven demand for the safety-linked currency.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.