On Monday, the Euro (EUR) gained against the US dollar (USD), with the Euro/USD pair climbing 0.3% to about 1.1740. Investors are now looking ahead to the Preliminary German inflation numbers set to be released on Tuesday at 12:00 GMT for September.
Traders are being a bit cautious, as they understand that the inflation data from Germany could influence expectations for the European Central Bank’s (ECB) monetary policy in the upcoming weeks.
The forecast suggests that the annual rise in the Consumer Price Index (CPI) for September might increase from the 2.2% seen in August. Additionally, the Harmonized Consumer Price Index (HCPI) is anticipated to rise to 2.2%, up from the previous month’s 2.1%.
Expectations are for a modest monthly increase of 0.1% for both indexes, matching August’s figures.
These upcoming numbers will shed light on the ongoing inflationary pressures within major eurozone economies, affecting the euro’s trajectory in the coming days.
Food and Services Continue to Drive German Inflation
The German economy is still grappling with persistent inflation, especially within food and service sectors. Annual inflation reached 2.2% in August, marking its highest level in five months, following 2% in July. According to the Federal Statistics Office (Destatis), this uptick was largely fueled by rising food costs, which increased by 2.5%, particularly driven by higher prices for fruits (7.1%), sugar, and dairy products (3.2%).
Conversely, energy prices have declined by 2.4%, an improvement from July’s -3.4%, thanks in part to smaller contractions in fuel and domestic energy costs.
Service prices maintained strong inflation, coming in at 3.1%, with significant contributions from passenger transport (11.1%) and social services (8.1%). The core inflation rate, excluding energy and food, remained steady at 2.7% for three consecutive months.
In August, consumer prices rose by 0.1%, which aligns with preliminary estimates and extends a slow but steady upward trend.
Historically, Germany has seen an average monthly inflation rate of about 0.21% since 1950.
Technical Analysis of EUR/USD: Is This a Temporary Rebound?
EUR/USD 4-hour chart. Source: FXStreet.
The EUR/USD started the week on a strong note, recovering from a low of 1.1645 last week.
However, before any downward trend resumes, the recent rise, which approached 1.1745, may simply be a technical bounce.
At present, the pair is testing the 100th Simple Moving Average (SMA) at 1.1751 on a 4-hour chart.
Any bullish break through these trendlines could signal a return to short-term uptrends with potential re-tests of resistance levels at 1.1820 and 1.1878, moving towards the recent high at 1.1918.
On the flip side, if the SMA and underlying trendlines confirm resistance, it could reignite light selling pressures, revisiting last week’s low of 1.1645 on the chart.
Today’s Euro Price
The table below presents the Euro’s rate of change against other currencies for today. Notably, the Euro performed strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.31% | -0.34% | -0.51% | -0.02% | -0.23% | 0.12% | -0.10% | |
| EUR | 0.31% | -0.04% | -0.35% | 0.28% | 0.08% | 0.42% | 0.19% | |
| GBP | 0.34% | 0.04% | -0.22% | 0.32% | 0.06% | 0.46% | 0.23% | |
| JPY | 0.51% | 0.35% | 0.22% | 0.52% | 0.31% | 0.50% | 0.45% | |
| CAD | 0.02% | -0.28% | -0.32% | -0.52% | -0.17% | 0.14% | -0.09% | |
| AUD | 0.23% | -0.08% | -0.06% | -0.31% | 0.17% | 0.34% | 0.12% | |
| NZD | -0.12% | -0.42% | -0.46% | -0.50% | -0.14% | -0.34% | -0.08% | |
| CHF | 0.10% | -0.19% | -0.23% | -0.45% | 0.09% | -0.12% | 0.08% |
The heatmap illustrates the rate of change among major currencies. The base currency is indicated in the left column, while the estimated currency is represented in the top row. For instance, selecting Euro from the left column and moving across to US dollars shows the rate of change in that cell, which represents EUR (base)/USD (QUOTE).
