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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

EUR/USD at 12-week highs – where next?

Economic data today at 1pmUK could be a further generator of movement with German CPI. Consumer price inflation is forecast to decelerate to 3.5% in November YoY, from 3.8% the previous month.

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To find a lower inflation rate, we have to go back to June 2021. Even though the ECB will have to look at inflation of all countries in the eurozone, Germany CPI data could still move the euro. Lower inflation wouldn't be necessarily bad news for the European currency. The euro has been rising against the dollar for the past two months and is on a rising trend against the pound since the very end of August. Lower inflation could mean that measures taken by the EBC are working. A higher-than-expected German inflation could also support the euro, even though it is not so good news for the European central bank. Meanwhile, in the US currency traders await the second reading of GDP in the third quarter. Economists anticipate an annualised expansion of 5% , the most since he last quarter of 2021. The first reading showed at 4.9% rise. Also due are wholesale inventories and the Fed Beige Book.

(AI Video Transcript)

EUR/USD

Today, we will keep a close eye on the EUR and the USD. The euro has been doing well against the dollar recently and it's expected to stay strong. Germany will release its consumer price inflation data, which is expected to show a slight decrease. This could have a big impact on the euro's performance. Inflation is important because it measures the rising prices of goods and services. If the inflation rate is lower than expected, it could mean that the European Central Bank's efforts to control inflation are working better than anticipated. This could provide support for the euro, which means it could continue to do well against other currencies.

GBP/USD

For traders, this is an interesting time to be in the market. You might want to consider setting your stop-loss at around 109 level and aim for a price target of 110.65 or even higher at 112.70. Setting a stop-loss is important because it helps limit your losses if the market goes against you. On the other side of things, lower inflation is not necessarily a bad thing for the euro. In fact, the euro has been gaining value against GBP/USD for the past two months. It's currently trading at 86.49 against the pound. So, lower inflation could actually be a positive sign for the euro.

US GDP

Over in the US, economists are predicting a 5% increase in the gross domestic product (GDP) for the third quarter. This is higher than the initial reading of 4.9%. This is a good sign for the US economy and could potentially impact the US dollar's performance. There's some other important data to keep an eye out for as well, like the release of the Fed beige book. This will give us more insight into the overall economic conditions in the US. So, it's clear that both sides of the Atlantic will be closely watching the euro-dollar trade as these economic indicators and inflation figures are released.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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