The euro remained range-bound against the greenback following the release of inflation data that met estimates. The US economic data was mixed with the building permits beating estimates and the housing starts failing to meet the market’s expectations. There were no other major economic releases yesterday. Overall, the EUR/USD pair traded in a range of between 1.0676 and 1.0719 in the past 24 hours.
The Eurozone annual inflation was 5.20% in August compared with 5.30% in July. The preliminary estimates from the Eurostat had pegged the inflation at 5.30%. Economists did not anticipate any change in the preliminary estimates. The reported figure is the lowest since January 2022.
In August 2022, the Eurozone annual inflation rate was 9.10%.
The inflation was led by a 2.41% rise in services costs. Food, alcohol, and tobacco rose by 1.98%. Non-energy industrial goods grew by 1.19%. However, energy fell by 0.34%.
Excluding energy, food, alcohol, and tobacco, the Eurozone core consumer price index increased by 5.30% y-o-y in August following a 5.50% rise in the previous month. The preliminary estimates had pegged the annual core inflation at 5.30%. Economists did not anticipate any change in the preliminary estimates.
According to the US Census Bureau, the country’s building permits increased by 6.90% in August to 1,543,000 units from 1,443,000 units in July and higher than forecasts of 1,440,000 units. The reported figure is 2.70% lower than the August 2022 figure of 1,586,000 units.
Single‐family authorizations were 949,000 units in August, up 2% from the July figure of 930,000 units.
Privately-owned housing starts were 1,283,000 units in August, down 11.30% from 1,447,000 units in July and lower than forecasts of 1,440,000 units. The reported figure is 14.80% lower than 1,505,000 units in August 2022.
Single‐family housing starts were 941,000 units in August, a decline of 4.30% from 983,000 units in July.
Furthermore, privately‐owned housing completions were 1,406,000 units in August, up 5.30% from 1,335,000 units in July and 3.80% above 1,355,000 units in August 2022. Single‐family housing completions were 961,000 units in August, down 6.60% from 1,029,000 units in July.
The mixed economic data from both the US and Europe is expected to keep the EUR/USD pair range bound in the short term.
Technically, the EUR/USD pair is arising after consolidating at 1.0690. The next major resistance is anticipated only near 1.0805. Additionally, the currency pair is trading above its 50-day moving average while the stochastic indicator is in the bullish zone. Therefore, we anticipate the EUR/USD pair to remain in an uptrend in the near term.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
