The euro has posted slight gains in the Wednesday session. Currently, EUR/USD is trading at 1.1430. On the release front, German Final CPI posted a gain of 0.2%, matching the forecast. Later in the day, the US releases PPI, which is expected to remain at 0.0%. We’ll also get a look at Unemployment Claims, with an estimate of 245 thousand. Fed Chair Janet Yellen will testify before the Senate Banking Committee. On Friday, the US releases CPI and retail sales numbers, so traders should be prepared for some movement from EUR/USD.
Germany may be the locomotive of the eurozone economy, but the bloc’s largest economy has not been immune to low inflation. Final CPI improved to 0.2% in June, compared to -0.2% in May. CPI has managed just one reading above 0.2% in 2017, and earlier in the week, WPI came in at 0.0%. German and eurozone inflation levels remain well below the ECB’s target of 2%, and with no indication that inflation levels will move higher anytime soon, the cautious ECB is unlikely to taper its aggressive stimulus package.
After a short hiatus, Washington is again abuzz over allegations of secret ties between Russia and the Trump administration during the US election. This week’s breaking news is the revelation that Donald Trump Jr. admitted that a Russian official contacted him and offered to provide him with evidence incriminating Hillary Clinton. Trump and the White House are trying to lower the flames and put a positive spin on the meeting, but the media and lawmakers (including Republicans) aren’t about to let Trump off the hook. The crisis is just the latest miscue for the Trump administration, which hasn’t been able to pass any significant laws through Congress, even though Republicans control both the House of Representatives and the Senate. The latest dark cloud over the White House has dampened investor confidence, and the euro took advantage on Tuesday, climbing close to the 1.15 line.
