This Week: EURUSD traders await ECB Inflation reading

The world’s most-traded FX pair has rebounded since the start of October, now back above its 200-day simple moving average.

Bloomberg’s FX forecast model predicts a 75% chance that EURUSD will trade between 1.0848 and 1.1061, with bulls surely eyeing the psychological 1.10 handle once more.

Although the implied one-week volatility for this currency pair is expected to remain subdued, the scheduled data releases and events in the days ahead could yet jolt FX markets.

EURUSD is ready to react if any of the economic data out of either side of the Atlantic offer fresh signals about what either the ECB and the Fed will do with their respective policy settings in 2024.

Events Watchlist
 

• Wednesday, November 29: Germany November CPI

The month-on-month CPI is expected to post a negative 0.1% print, while the year-on-year CPI is forecasted to come in at 3.5%, both lower than October’s figures. Yet, a surprise uptick in inflation may reinvigorate ECB hawks, perhaps offering a limited boost to the euro, despite Germany’s ongoing economic woes.
 

• Thursday, November 30: Eurozone November CPI

The larger EURUSD reaction will likely be reserved for Germany’s CPI that’s released the day prior. Still, the broader Eurozone’s inflation data bears watching. Though these CPI prints are forecasted to moderate lower year-on-year to 2.7% for headline CPI and 3.9% for core, policymakers will be wary of a resurgence in inflation.
 

• Friday, December 1: Speech by Fed Chair Jerome Powell

This week is littered with US economic data, including consumer confidence, GDP, and jobless claims; each could offer fresh signals about the Fed’s 2024 policy outlook. Still, it’s better to hear from the horse’s mouth.

If Chair Powell can push back on market bets over US rate cuts next year, that may support the US dollar while potentially delaying the quest by euro bulls to reclaim the psychologically-important 1.10 level.

Here’s comprehensive list of other key economic data and events due this week:

Monday, November 27

• CNH: China October industrial profits
• EUR: Speech by ECB President Christine Lagarde

Tuesday, November 28

• AUD: Australia October retail sales
• EUR: Germany December consumer confidence
• USD: US November consumer confidence, manufacturing index; speeches by Fed Governor Chris Waller and Chicago Fed President Austan Goolsbee

Wednesday, November 29

• AUD: Australia October CPI
• NZD: RBNZ rate decision
• CNH: China November PMIs
• EUR: Germany November CPI; Eurozone November economic confidence
• GBP: Speech by BOE Governor Andrew Bailey
• OECD releases economic outlook
• USD: 3Q GDP (second estimate); Fed Beige Book; speech by Cleveland Fed President Loretta Mester

Thursday, November 30

• JPY: Japan October retail sales, industrial production
• CNH: China November PMIs
• EUR: Eurozone November CPI; October unemployment
• Brent: OPEC+ meets online
• CAD: Canada September GDP
• USD: US weekly initial jobless claims; October PCE deflator, personal income

Friday, December 1

• JPY: Japan October jobless rate
• CNH: China November Caixin manufacturing PMI
• CAD: Canada November unemployment
• USD: Speeches by Fed Chair Jerome Powell and Chicago Fed President Austan Goolsbee; US November ISM manufacturing