THE TAKEAWAY: Euro-zone inflation remains at 1.6% in July according to final estimate -> Unclear how stagnant inflation will affect ECB policy -> Euro trading unchanged
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Euro-zone inflation was confirmed to have remained at 1.6% for the second straight month in July, according to the final estimate of the year over year consumer price index. The 1.6% annual inflation rate set a four month high, only three months after the inflation rate set a three year low at 1.2%. Consumer prices rose 0.5% on a monthly basis in July, according to Eurostat.
The Euro-zone trade balance was also reported today at 17.3 billion Euros for June, up from a revised 14.5 billion Euros in May.
European Central Bank President Draghi said in August that rates will remain at current or lower levels for an extended period of time, and a rise in annual inflation might have discouraged the central bank from further cutting the interest rate or using unconventional monetary tools. Therefore, the unchanged inflation rate is still below the central bank’s 2% target, and the as-estimated inflation rate did not affect Euro trading.
The Euro continues to trade below 1.3350 against the US Dollar, as it has for almost all of today’s European session. EUR/USD may next see resistance by a monthly high set recently at 1.3400, and support may be provided by a broken resistance line around 1.3180.
The European session was fairly quiet today, and the inflation and trade balance releases were the most significant ones of the session. During the North American session, the University of Michigan Confidence will be released at 13:55 GMT.
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EURUSD Daily: August 16, 2013
Chart created by Benjamin Spier using Marketscope 2.0
— Written by Benjamin Spier, DailyFX Research. Feedback can be sent to bbspier@fxcm.com .
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.Learn forex trading with a free practice account and trading charts from FXCM.
Source: Daily fx
