EUR poised to rise on GDP figures, uptick in household sentiment may lift USD

Philip McHugh January 30th 2018 - 2 minute read

  • Eurozone GDP likely to strengthen EUR
  • German inflation expected to hold steady
  • Rise in US sentiment may bolster USD

Eurozone GDP Forecast to Hit 10-Year High

The euro may be given another leg-up later this morning as the Eurozone publishes its preliminary GDP reading for the fourth quarter.

Economists forecast the first reading will show the Eurozone economy continued to expand at a robust pace of 0.6% in the last three months of 2017.

However it’s the annualised figures that are likely to be in focus for investors today. They are expected to confirm that 2017 represented the currency bloc’s fastest year of growth in a decade, with some analysts predicting that year-on-year growth may have struck 2.7%.

The figures are likely to reinforce the bloc’s stellar performance last year and may spur optimism over the potential for similar growth in 2018 given the data published so far.

German inflation expected to hold steady

Also likely to influence the EUR exchange rate in today’s session will be the release of Germany’s latest consumer price index this afternoon.

The latest CPI reading from the EU’s largest economy is expected to show that inflation held steady at 1.7% at the start of year.

While a robust reading may help the euro hold onto any gains a surprise uptick could give the currency some extra lift on hopes it may help offset an expected slide in the wider Eurozone inflation reading tomorrow.

Uptick in US consumer confidence may bolster USD

The US dollar may also find some gains later today following the publication of the latest US consumer confidence figures.

Economists predict this month’s sentiment index will have climbed from 122.1 to 123.

While this will still leave the index short of the 17-year high struck in November, the relatively strong reading will still see sentiment start 2018 on strong footing.

Recent confidence has been fueled by several factors in the US, with the strong jobs market, surging stock market and optimism surrounding the Republican tax cuts all reflecting positively on household sentiment.

Upcoming Data

Tuesday, 30 January, 2018
10:00                     EUR GDP Q4   
13:00                     EUR German Inflation
15:00                     USD Consumer Confidence

Written by
Philip McHugh

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