After strengthening yesterday (especially against the US dollar), the euro is gaining this morning. The currency has been benefiting from US dollar weakness in recent history. Despite optimism regarding tax cuts, markets are not pricing in additional rate hikes in 2018. Looking at the Eurozone, recent inflation data came within consensus estimates. As CPI is currently tracking at 1.5%, inflation remains below the ECB's target of 2%. Later today, we'll see Eurozone wage figures and German IFO survey data. Our medium-term outlook on the euro remains bullish.
The EUR/USD exchange rate is now trading above 1.1790. Looking at EUR/JPY, the pair is up today and is currently trading just above 132.70. The euro is up against the pound, with EUR/GBP now trading above 0.8810.
This week’s Eurozone events and economic data includes Eurozone inflation and German survey data. Eurozone CPI figures met estimates (1.5%). Later today, we’ll get German IFO survey results and Eurozone wages. On Wednesday we’ll see German producer prices. Finally on Friday we’ll see German consumer confidence. Last week, the ECB upgraded its outlook for growth and inflation while maintaining its current monetary policies.