Euro Weakens in Anticipation of German Inflation Numbers
The single currency continues its downward trend. The euro/dollar pair lost another 0.26% to trade at 1.1710 level. The US central bank raised the benchmark rate by a quarter-point, to a range of 2%-2.25% yesterday. Another rate hike is expected in December and three hikes in 2019.
Economic confidence in the euro area further weakened in September. The Eurozone economic sentiment index fell to 110.9 in September from 111.6 in August. It was expected that the estimate would be 111.2. The consumer sentiment index declined to -2.9, in line with flash estimate, from -1.9 a month ago. The industrial confidence index fell to 4.7 from 5.6 in August.
The European Central Bank’s economic bulletin showed, that the Bank expects global growth to slow in the near term amid escalating global trade war. The report highlighted “further tariff increases and uncertainties about future trading relations” as factors which could dampen global growth. Still, with the ECB said Eurozone economy performing fairly well. So that, the regulator intends to halve its monthly asset purchases to EUR 15 billion, and wind up the stimulus program in December.
Today, Germany will release Preliminary CPI and US publish Final GDP, jobless claims and durable goods orders. German CPI numbers for September are expected to show that inflation in Germany have remained subdued at 1.9%. US Final GDP is expected to post a strong gain of 4.2%. US Core durable goods orders and durable goods orders are expected to improve in August, with forecasts of 0.4% and 1.9%, respectively.