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Euro stays above 1.1500 as investors await Eurozone inflation data

Eurozone HICP is expected to rise to 2.9% year over year in July, after GDP and earlier inflation prints supported ECB rate hike expectations for September.

Reported · Written up by our desk · Major Pairs

The euro edged lower against the US dollar on Friday, but it held near six-week highs above 1.1500, remaining on track for a 1.3% weekly gain, according to FXStreet.

The next catalyst for EUR/USD is the release of July preliminary Eurozone inflation figures, which investors will use to judge the likelihood of an ECB rate hike in September. Eurozone headline HICP is expected to have increased to 2.9% year over year from 2.8% in June, while core inflation is forecast to hold around a 2.8% year over year pace.

FXStreet also pointed to supportive recent data in the run-up to the inflation release. France’s preliminary CPI showed annual inflation rising to 2.4% in July from 2.0% in June, while preliminary German HICP rose to 2.8% from 2.4%.

More broadly, Eurozone preliminary GDP growth surprised to the upside with 0.4% growth in the second quarter and 1.0% year over year, helping reinforce hopes for September tightening. Analysts at ING cautioned that euro strength may have limits, adding that EUR/USD may still find buyers around 1.150 for some time.

Latest closeEUR/USD 1.153 ▲0.5%

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