The euro rose against the greenback yesterday following the release of German inflation data that was in line with estimates. The euro’s uptrend was also fueled by the slightly lower than anticipated US consumer inflation data for July. Overall, the EUR/USD pair rallied from a low of 1.0202 to a high of 1.0355 in the past 24 hours.
According to the final data published by the German statistical agency Destatis, the country’s inflation rate rose by 0.90% m-o-m in July, following a 0.10% rise in the prior month. The preliminary estimates pegged the inflation rate at 0.90%. Economists did not anticipate any change in the initial estimates.
On a y-o-y basis, the consumer price index surged 7.50% in July 2022. Notably, in June 2022, the inflation rate was 7.60%. Energy products were primarily responsible for the high inflation. Transport prices rose by 5.40% y-o-y in July, down from 8.30% and 10.30% rises in June and May, respectively.
Energy product prices jumped 35.50% y-o-y in July, following a 38% surge in June. Heating oil prices skyrocketed by 102.60%. Likewise, natural gas prices grew by 75.10%.
In the US, the Bureau of Labor Statistics stated that the country’s consumer price index remained unaltered in July, following a 1.30% rise in the prior month, and missing the 0.20% increase anticipated by economists.
On a year-on-year basis, the consumer price index grew by 8.50% in July. In June, the consumer price index rose by 9.10%.
The gasoline index declined 7.70% in July. However, it was negated by the rise in the food and shelter indexes. The energy index dropped 4.60% m-o-m in July. The food index continued to increase, rising 1.10% m-o-m as the food at home index grew by 1.30%.
Excluding volatile goods such as food and energy, core CPI grew by 0.30% m-o-m in July, following a 0.70% rise in June, but missed the 0.5% growth anticipated by economists.
On a y-o-y basis, the core CPI grew by 5.90% in July. The energy index surged 32.90% y-o-y in July. The food index jumped 10.90% in the same period and represented the steepest annual rise since the period ending May 1979.
As per the final data published by the US Census Bureau, the country’s wholesale inventories grew by 1.80% m-o-m in June to $895.40 billion, following a 1.90% rise in May, and a notch better than the 1.90% increase anticipated by economists.
Total inventories surged by 25.50% y-o-y in June 2022. Also, the June inventory to sales ratio for merchant wholesalers was 1.26, a decline from June 2021’s level of 1.21.
The mixed economic data from the US is expected to keep the EUR/USD pair range-bound with a slight bullish bias in the short term.
The historical price chart indicates that the EUR/USD pair is rising after testing the support at 1.0140. The next resistance is anticipated only near 1.0450. Additionally, the currency pair is trading above its 50-day moving average while the stochastics indicator is in the bullish zone. Therefore, we are anticipating the currency 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.
