EUR/USD has edged lower in the Wednesday session. Currently, the pair is trading at 1.1576, down 0.24% on the day. On the release front, Eurozone industrial production declined 0.8%, missing the estimate of -0.5%. In the U.S, PPI and Core PPI are both expected to rise to 0.2%. On Thursday, Germany releases CPI and the ECB sets its monthly interest rate, which is expected to remain pegged at 0.00%. The U.S will publish CPI as well as unemployment claims.
The ECB is expected to hold rates at 0.00% on Thursday, so the markets will be focusing on the rate announcement and Mario Draghi’s press conference. The Bank is expected to lower its growth forecast due to weaker global growth and could spell out downside risks to growth. Inflation is expected to remain steady at 1.8% in 2018 in 2019, which means that the ECB is on track to wind up its asset-purchase program in December.
The U.S-China trade spat has been in the headlines for months, with the U.S slapping tariffs on China and the latter responding in kind. Will President Trump ratchet up the trade war between the world’s two largest economies? Trump has threatened to impose tariffs on $200 billion worth of Chinese tariffs, and the time period for public consultations ended last week, which means that Trump is free to announce another round of tariffs at any time. Despite fears that the trade war could trigger a recession trade between the U.S and China actually increased in August. The dollar has benefited from the global trade war, and further tariffs against China could boost the greenback against its major rivals, including the euro.
