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Euro under pressure ahead of German inflation data

business-articlesEuro under pressure ahead of German inflation data
  • Euro weakens thanks to lacklustre German import price index
  • Narrowing of Conservative triggers GBP fluctuations 
  • Market trade scepticism limits Canadian dollar support
 
Euro looks for rallying point on higher German inflation
 
Another sharp decline in the German import price index on the year left the euro under pressure yesterday by pointing towards a lack of inflationary pressure within the Eurozone’s powerhouse economy.
 
However, the appeal of the single currency could improve sharply this afternoon if November’s German consumer price index picks up as forecast.
 
Investors expect to see the headline inflation rate strengthen from 1.1% to 1.2%, suggesting that price pressures are still building within the economy.
 
While this would fall well below the European Central Bank’s (ECB) 2% inflation target an improvement could still shore up EUR exchange rates.
 
Pound remains vulnerable to election jitters
 
The narrowing of the Conservative Party’s lead in the polls triggered some fairly notable fluctuations in the Pound yesterday.
 
GBP exchange rates remain vulnerable to political developments as the election draws closer.
 
If the risk of a minority Conservative government rises this could weigh heavily on Sterling, with such a scenario increasing the odds of a no-deal exit.
 
 
Widening current account deficit set to drag Canadian dollar lower
 
Optimistic trade signals from the White House failed to shore up the Canadian dollar yesterday as markets remain sceptical of the odds of an imminent breakthrough in US-China talks.
 
Further losses could be in store for CAD exchange rates on the back of the third quarter current account report.
 
Forecasts point towards the current account deficit widening from -6.3 billion to -9.0 billion in the last quarter.
 
 
Upcoming Data:
 
Thursday, 28th November 2019
13:00 EUR German Consumer Price Index
13:30 CAD Current Account
 
 
Philip McHugh

Philip McHugh

Joining the corporate trading desk in 2007, Phil now over sees all of Currencies Direct’s corporate dealing activity. Having gained experience working with hundreds of businesses to optimise international payments processes and execute comprehensive risk management strategies, Phil currently works with a portfolio of corporate clients whilst managing Currencies Direct’s overall market exposure

Phil has FCA approval and has completed the Certificate in International Treasury Management (CertiTM)

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