The euro remained range-bound against the greenback yesterday as the market was closely tracking developments in the Middle East. As the conflict between Israel and Hamas is now expected to last for weeks, if not months, traders and investors are looking for cover in the form of safe-haven assets. Additionally, the market is also looking for concrete signals from the Fed regarding interest rates. Overall, the EUR/USD pair traded between 1.0581 and 1.0635 in the past 24 hours.
According to the final data published by Destatis, the German consumer price index inched up 0.30%m-o-m in September, following a similar increase in the previous month and in line with economists’ estimates.
On a y-o-y basis, the German consumer price index grew by 4.50% in September 2023.
Food prices surged 7.50% y-o-y in September. Energy product prices rose by 1%y-o-y in September. Excluding energy prices, German inflation stood at 5% in September 2023. The price of services grew by 4%y-o-y in September. Likewise, the prices of goods increased by 5% in the same period.
Commenting on the data, Ruth Brand, President of the Federal Statistical Office, opined, “The inflation rate has reached its lowest point since the commencement of the Ukraine conflict, but it persists at elevated levels. It is evident that consumers continue to grapple with the impact of increased food costs.”
According to the US Bureau of Labor Statistics, the country’s producer price index inched up 0.50% m-o-m in September, following a 0.70% increase in the previous month and greater than forecasts of 0.30% growth.
The index for final demand rose by 2.20% y-o-y in September 2023, reflecting the largest growth since increasing 2.30% in the year ended April. The index for final demand goods inched up 0.90% in September, mirroring the third successive growth.
Almost 75% of the increase in September is attributable to a 3.30% growth in energy prices. While the index for final demand foods rose by 0.90%, the index for final demand goods less foods and energy inched up 0.10%.
The increase was primarily led by a 5.40% surge in the index for gasoline.
Also, the index for final demand services inched up 0.30% in September, following a 0.20% growth in August. Likewise, the index for final demand trade services inched up 0.50%.
Excluding foods, energy, and trade services, the core producer price index inched up 0.20%m-o-m in September, following a similar increase in the previous month and line with estimates. The reported figure reflects the fourth successive monthly increase.
On a y-o-y basis, the core PPI jumped 2.80% in September.
Irrespective of the economic data, the Middle East conflict is expected to keep the haven currency, such as the US dollar, slightly bullish in the short term.
Technically, the EUR/USD pair is ascending after testing the support at 1.0490. The next resistance is anticipated to be only near 1.0740. 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 for the next few trading sessions.
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.
