EMU CPI Preview: what to expect of EUR/USD

Advanced inflation figures tracked by the CPI are next on tap in the euro area, along with flash figures of the GDP during the July-September period. Market consensus sees consumer prices rising at an annualized 0.5% during last month, up from August’s 0.4% gain. Prices stripping Food and Energy costs are seen advancing 0.8% over the last twelve months.

The CPI in the region has been ticking higher since June albeit at a snail-pace. A positive result today will add to the prevailing uptrend, although consumer prices still remain far from the ECB’s 2% target.

In addition and regarding GDP, markets’ bets expect the economy of the region to expand at an annualized 1.6.%, keeping the growth at a somewhat constant rate. Inter-quarter, the economy is expected to grow 0.3% QoQ.

Regarding FX, EUR/USD remains entrenched in the red territory so far, amidst a pick up in the demand for the greenback and retreating from Friday’s bullish attempt to the 1.1000 handle. The next support of relevance comes around the 1.0900 neighbourhood, post-Brexit lows followed by the 1.0820 area, March’s low. On the upside, the initial barrier aligns at Friday’s spike near 1.10 the figure.