The Euro remained range-bound against the US dollar yesterday on the heels of positive economic data from Europe and the US. While the German consumer price index (CPI) data for April met estimates, the US core CPI data for April surpassed expectations. The EUR/USD pair continued to stay range-bound between 1.0556 and 1.0576 in the past 24 hours.
According to the final data published by Destatis, the German consumer price index (CPI) rose by 0.80% in April, down from the previous month’s rise of 2.50%, reflecting the highest reading since October 1951. The initial estimates pegged the increase in the CPI at 0.80%. Economists did not anticipate any change in the initial estimate.
On a y-o-y basis, the German consumer price index rose by 7.40% in April 2022, reflecting an all-time high. The sharp increase in energy product prices paved the way for the surge in CPI.
Overall, on a y-o-y basis, the prices of goods surged 12.20% in April 2022. Energy product prices recorded an increase of 35.3% y-o-y in April 2022. In particular, heating oil recorded a steep price rise of 98.60%. Motor fuels and natural gas posted an increase of 38.50% and 47.50%, respectively. The increase was primarily due to the Russia-Ukraine war.
Likewise, food prices posted a rise of 8.60%. Specifically, edible fats and oils posted a rise of 27.30%. Also, meat and meat products recorded an increase of 11.80%. Dairy products and eggs, and fresh vegetables witnessed an increase of 9.40% and 9.30%, respectively.
Excluding energy prices, the inflation rate was 4.30% in April 2022.
The prices of services grew by 3.20% y-o-y in April 2022, primarily due to a 1.60% rise in rental costs.
In the US, the Bureau of Labor Statistics stated that the consumer price index (CPI) increased by 0.30% m-o-m in April, following a rise of 1.20% in the prior month and a notch greater than the 0.20% growth anticipated by economists.
On a y-o-y basis, the US CPI grew by 8.30% in April 2022.
The food index increased 0.90% m-o-m in April, reflecting the 17th successive monthly rise. However, the energy index fell by 2.70% in April, following a rise of 11% in March.
Excluding food and energy, the US core CPI rose by 0.60% m-o-m in April, following a 0.30% increase in March and greater than the 0.40% growth anticipated by economists.
On a y-o-y basis, the US core CPI grew by 6.20% in April. The surge was led by the energy index, which recorded a jump of 30.30% y-o-y in April 2022. The food index jumped 9.40%, the steepest 12-month rise since the period ended in April 1981.
The solid economic data from both Europe and the US are expected to keep the currency pair range-bound in the short term.
The historical price chart reveals that the currency pair is rising after testing the support at 1.0500. The next resistance is expected near 1.0590. Also, the EUR/USD is trading above its 50-day moving average, while the MACD indicator has a positive reading. W are expecting the pair to stay in an uptrend in the short term.
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