EUR/USD has posted slight losses on Wednesday, as the pair has dropped below the 1.27 line in the European session. The euro remains under pressure, having lost over 100 points since early Tuesday. On the release front, there are no major Eurozone releases on the schedule. In the US, today’s highlight is Core CPI and CPI. The markets are keeping expectations low for the September readings.
Despite the efforts of the ECB, inflation levels in the Eurozone remain anemic, as German PPI came in at a flat 0.0%, shy of the estimate of 0.1%. The indicator has not produced a gain since December, as Germany continues to struggle with a lack of inflation. Eurozone Current Account, which is closely linked to currency demand, posted a surplus of EUR 18.9 billion, little changed from the previous release of EUR 18.7 billion. This reading disappointed the markets, as the estimate stood at EUR 21.3 billion.
The Deutsche Bundesbank issued its monthly report on Monday. The German central bank said that the economy showed little growth in the third quarter, as manufacturing production fell and business confidence weakened. At the same time, employment numbers and consumer spending were higher, so GDP was likely to remain unchanged. As for Q4, the report stated that the outlook is “moderate”. The report underscores weakness in the German economy, long considered the locomotive of Europe. The euro is sensitive to German data, so weak German numbers could hurt the shaky euro.
EUR/USD 1.2692 H: 1.2740 L: 1.2681
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