On Tuesday, July 13, the Euro to USD exchange rate was steady. Investors are waiting for the US inflation data later in the day. The single currency is currently trading at $1.1841, which was virtually unchanged from today’s opening marks.
Meanwhile, the economic calendar points to another month of high inflation for the US dollar. 4.9% is on the headline, and 4% is in the core consumer price index.
Analysts predict that if inflation misses the forecasts, the timeline for the tapering of bond purchases will be pushed back. This will inspire a potential bearishness in greenback traders.
In general, investors emerged to be waiting for the cut-and-dry statistics before making any hawkish decisions.
Later in the week, the industrial production figure and retail sales might also influence the movement of the US dollars.
Analysts are expecting that the former will have a month-on-month gain while the latter will have a decline of 0.4%.
On the other hand, the euro is weakening following the European Central Bank’s reiteration of its pledge to be persistent in its tapering strategy. The bank added it would continue to resist its previous mistake of tightening the monetary policy too early. These comments created a huge disappointment in the bullish expectations of the EUR investors.
As of the moment, the ECB remains one of the few exceptions of central banks that are becoming increasingly hawkish.
According to analysts, another factor that limits the gains of the single currency is the speed of the COVID-19 delta variant spreading across Europe.
Moreover, France, Spain, and the Netherlands announced new measures to curb further infections, which will largely affect their economic recovery.
USD Remained Flat
Furthermore, USD also remained flat ahead of the release of the US inflation data.
The Dollar Index, which trails the greenback against its six other rival currencies, traded flat in limited volume at $92.257.
Looking forward, the most awaited inflation figures will inspire the movements within the currency pair alongside the coronavirus cases development that will determine any additional fluctuations.
The spread of the delta variant is likely to benefit the US dollar. This is because it threatens the pace of economic recovery worldwide regardless of whether the inflation data are high or low.
Later in the week, the eurozone inflation has the capability to assist the euro in climbing closer to its levels in early June.