The euro experienced limited fluctuation against the US dollar yesterday, reacting to disappointing economic figures from Germany and the United States. German producer price inflation didn’t meet expectations, and the US Conference Board’s leading economic index experienced a greater decline than what markets had predicted. As a result, the EUR/USD pair maintained a tight trading range, oscillating between 1.0900 and 1.0940 over the previous 24 hours.
According to Destatis, German producer price inflation inched down 0.10% m-o-m in October, following a decline of 0.20% in September and worse than forecasts of no change.
On a y-o-y basis, German producer prices fell by 11% in October 2023. This compares with a decline of 14.70% y-o-y, representing the steepest drop since 1949 in September 2023.
Energy producer prices fell by 27.90% y-o-y in October. On a m-o-m basis, energy prices inched down by 0.10% in October. Specifically, electricity prices plunged by 36.20% y-o-y in October. Compared with September, electricity prices declined by 1.40%. Also, petroleum product prices fell by 13.20% y-o-y in October 2023. Excluding energy, producer prices inched up 0.20%y-o-y in October 2023. However, it decreased by 0.20% compared with September 2023.
Prices for intermediate goods declined 4.60%y-o-y in October 2023. Compared with September 2023, intermediate goods prices decreased by 0.20%. In particular, producer prices of metals plunged 11.70%y-o-y in October 2023. Also, chemical raw material prices decreased by 12.10% in the same period.
Consumer goods prices rose by 3.90% y-o-y in October 2023. However, it inched down by 0.20% from September 2023.
The US Conference Board-leading economic index (LEI) inched down 0.80% m-o-m in October following a 0.70% decline in the previous month. Economists anticipated only a decline of 0.50%.
Furthermore, the LEI contracted by 3.30% in the six months ended October 2023, compared with a 4.50% decline in the earlier six months ended April 2023.
The Conference Board Coincident Economic Index stood unchanged at 110.80 in October. However, the US Conference Board Lagging Economic Index (LAG) increased 0.10% in October 2023 to 118.60, following a similar rise in September.
The weak economic data from both countries is expected to keep the EUR/USD pair range-bound soon.
The historical price chart indicates that the EUR/USD pair is gaining ground after consolidating at 1.0690. The next resistance is anticipated to be only near 1.1065. Additionally, the currency pair trades above its 50-day moving average while the stochastic indicator is bullish. Therefore, we anticipate the EUR/USD pair to remain uptrend soon.
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.
