Forex Today: Key EU and US Data Announcing Inflation Risk

Forex Today: Key EU and US Data Announcing Inflation Risk

Currency markets remained relatively subdued following a volatile Wednesday. The spotlight today shifts to Eurozone inflation data and the US economic calendar. Market participants eagerly await the European Central Bank (ECB) Monetary Policy Meeting Accounts release. In the second half of the day, the US will reveal the Personal Consumption Expenditures (PCE) Price Index, a crucial inflation risk indicator, along with the weekly Initial Jobless Claims data.

Eurozone Inflation Preview: Could There Be Any Benefits of Inflation?

As the European Central Bank’s (ECB) hawks may not be entirely satisfied despite a decline in price pressures, the upcoming Eurozone inflation figures hold significance. This information could shape the central bank’s future decisions.

US GDP Growth Revised Down, USD Under Pressure

The US Bureau of Economic Analysis reported a revised annualized second-quarter Gross Domestic Product (GDP) growth of 2.1%. The rate has gone down from the initial estimate of 2.4% in demand-pull inflation. Additionally, private-sector employment rose by 177,000 in August, falling short of the expected 195,000 increase. These disappointing data releases led to a decline in the benchmark 10-year US Treasury bond yield, contributing to the US Dollar’s struggle during American trading hours. The US Dollar Index (DXY) saw its third consecutive day of losses, now trading just above 103.00.

Crypto Market Update: Impact of Delisting and Price Trends

Binance’s announcement of delisting trading pairs such as IOTA and ANKR stirred the cryptocurrency market. IOTA experienced a -3.50% price drop, while ANKR saw a -37.51 % drop in transaction volume over the past 24 hours. Meanwhile, Bitcoin and Ethereum underwent fluctuations in response to market dynamics.

Inflation in Europe vs. UK: Fed’s Preferred Indicator Above Target

The Core Personal Consumption Expenditures Price Index is currently the Fed’s top-tier inflation gauge. The rate is getting ready to rise 0.2% MoM and 4.2% YoY in July. Federal Reserve Chair Jerome Powell’s data-dependent approach and the potential impact on the US Dollar may occur.

Eurozone Inflation Report: ECB’s Monitoring and Outlook

Eurostat’s preliminary estimate of the Eurozone Harmonized Index of Consumer Prices (HICP) is expected to show a slowdown in core inflation risk to 5.3% in August. The European Central Bank’s commitment to achieving its 2.0% inflation rate target without triggering a recession underscores the complexity of the interest rate outlook.

The forex market braces for a day filled with key economic data releases, hoping to gain insights into inflation trends in both the Eurozone and the US.