Data due next week includes Eurozone inflation data. Analysts at Wells Fargo expect data to show price growth slowed in November but is still elevated. They see the European Central Bank tightening monetary policy through the end of 2022 and EUR/USD slipping back below parity.
Key Quotes:
“Europe has seen persistent inflationary pressures, and next week, we expect those pressures to still be reflected in November CPI data. To that point, headline inflation is currently 10.7% year-over-year; however, we expect November data to show price growth slowed over the course of the month, but remains elevated. While energy prices have come down and supply chain disruptions have eased, natural gas supply disruptions have kept inflation well above the European Central Bank’s (ECB) target range.”
“Policymakers have communicated interest rates are likely to rise in the near future, and while we believe additional tightening is likely, the ECB is unlikely to deliver the amount of tightening priced by financial markets. In that sense, we expect the euro to slip back below parity as markets adjust to a more gradual pace of tightening.”
“Eurozone inflation is likely to remain above the ECB’s target for all of 2023, only starting to head on a downward trajectory in a few months’ time.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.