The EUR/USD is up by 0.27% even after the weak inflation data from Germany, Italy, and Spain. The pair is trading at 1.1935, which is a few pips below August’s high of 1.1963. It has gained more than 1.9% in August. Also, it has gained for the past four months, the longest winning streak since 2017.
European inflation disappoints
The biggest economic data today was Germany, Spain, and Italy inflation data. According to the Federal Statistical Office in Germany, the country’s inflation is expected to be 0.0% in August. On a month-on-month basis, the consumer prices are expected to decline by 0.1%, partly because of the reduction of the value added tax. Analysts polled by Reuters were expecting the increase to 0.1% (YoY) and fall by 0.2% (MoM).
Meanwhile, in Italy, the headline consumer price index is expected to fall to -0.5% year-on-year and rise by 0.3%. At the same time, the harmonised inflation rate is expected to fall to -1.3% and to 0.5% on a MoM and YoY, respectively. In Spain, the CPI is expected to rise to 0.0% MoM and to fall to -0.5%, respectively.
The EUR/USD pair also reacted to weak GDP data from Italy. According to the Italian statistics office, the country’s economy contracted by 17.7% in the second quarter. That decline was worse than the 17.3% that analysts were expecting. It declined by 12.8% on a quarter-on-quarter basis. While this decline was bad, it was better than the 20% decline of the UK and the 32.5% contraction of the United States.
EUR/USD August review
In general, the EUR/USD pair has had a positive month. It has risen by more than 1.20%, making
