Forex snapshot

Euro awaits CPI and GDP data and sterling continues to slide after yesterday’s collapse. 

Euro/dollar currency
Source: Bloomberg

Euro eyes GDP release

The euro is under pressure versus the US dollar after France and Germany reported worse-than-expected data.

The euro is trading at $1.3362. Traders are digesting the decline in growth in Germany, and the zero growth from France in the second quarter. Keep in mind Italy slipped into recession last week.

The eurozone will release the final CPI and flash GDP report at 10am (London time). The consensus is for 0.4% and 0.1% respectively, and it is rather worrying that the core eurozone nations are struggling. The standoff with Russia is taking its toll on economic activity and sentiment, but this is not fully reflected in the value of the currency.

Soft CPI and GDP figures could put more pressure on the European Central Bank to ease their monetary policy further, which may drive the euro below the $1.33 mark with $1.3415 acting as resistance.

Sterling continues to slide

The pound is still on shaky ground versus the US dollar after its collapse yesterday.

The pound is trading at $1.6662, down 0.15% on the day, as traders continue to be bearish on the currency pair. Mark Carney is in no rush to raise the interest rate after the revelation that wage growth in the UK dropped, which suggests that the recovery isn’t as strong as previously thought. US jobless claims is due out at 1.30pm and the consensus is for a reading of 307,000.

The 200-day moving average of $1.6744 is acting as resistance. The pound is oversold but a lack of a bounce back today would suggest the next level down is $1.66.

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