The story is always the same: Whenever the euro increased its value too rapidly only because of speculation against the U.S. dollar, someone has to talk down the currency. This is what happened yesterday. European Central Bank member Ewald Nowotny said yesterday in Warsaw, that core inflation in the euro area is “clearly missing the ECB’s target”. He added that “…in my view it is quite obvious that in the current economic situation additional sets of instruments are necessary. These include structural measures”. His comments were perceived as a signal that the ECB could step-up more stimulus in the near-term. In response to the remarks, the euro bounced off the 1.15-level and weakened significantly against the U.S. Dollar.
In the end, the euro was re-balanced, falling back into its recent trading ranges below 1.14.
Moreover, the dollar received support from better than expected U.S. Consumer Prices.
It was not a good day for sterling traders. The British pound refused to trade above 1.55 and there was neither further bullish nor fresh bearish engagement in the GBP/USD. We had therefore to struggle with stop-losses without a profitable ending.
What is important for today?
Eurozone Consumer Prices are scheduled for release at 9:00 GMT today, which could have an impact on the EUR/USD.
Furthermore, traders should have an eye on today’s U.S. data. U.S. Industrial and Manufacturing Production are due for release at 13:15 GMT, followed by Michigan Confidence at 14:00 GMT.
We wish you a profitable trading day and a beautiful weekend.
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