This week illustrator Derek Bacon pelted rocks through the windows of a euro note: a fitting image for our briefing on the future of this badly damaged single currency.
The euro has rallied almost 1000 pips in the last 14 days. Despite this impressive rally, many market participants feel this way about the euro. Eventually the market will again too.
European traders anticipate the publication of the German CPI. The German Consumer Price Index (CPI) measures the changes in the price of goods and services. The CPI measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation in Germany.
A higher than expected reading should be taken as positive/bullish for the EUR (as the common way to fight inflation is raising rates, which may attract foreign investment), while a lower than expected reading should be taken as negative/bearish for the EUR.
Analysts predict a future reading of -0.10%.
(via Forexpros.com)
I will be interested in markets’ reaction to inflation data. Deflation, if it comes in as expected, should be taken as good news by the European credit markets as falling inflation is good for bond prices.
“Despite recent rebound in GBP against the dollar and the euro, we continue believe that the pound remains undervalued.”
I am a woman born to Nigerian parents, walking with God, interested in art and technology yet passionate about economics, investments, and capital markets.
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