Euro Is Preparing For a Fall When Pound Strengthens
By Daisy Joseph
After optimistic comments from Draghi, the Euro was set on a rising path against the US dollars. However, the CPI data may not be favorable for the currency. The retracement path set by CPI data may push Euro down from its high levels. The European trading hours were dominated by the Eurozone CPI numbers. The inflation rate is expected to get below 1.2% which is the lowest inflation rate in the past four years. The data from Germany also showed an upward trend, but the value of Euro surprisingly followed a declining path.
The release of CPI data has a much greater impact than the market significance. When the data aligns with the forecast, it could mean that the currency is set for profit taking before the weekend. The Euro has gained significantly in the past few days. Any correction to the currency value could result in the reduction of gains. The value of the currency could also reach a lower point due to poor CPI data.
Apart from this, the market is also expecting UK GDP figures to be released shortly. According to the estimates, GDP could be an additional 0.2% in the first quarter. Any gain in the GPD figure should result in the upward movement for Pound. The hawkish comments from BOE officials have already increased the interest of the investors in the market. The extended support could help the Pound to move up against major currencies.
The US dollar faced a decline during Asian trading as the Treasury yields faced losses. This is due to the increased support for the benchmark currencies.
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