EUR/USD: Softer inflation data should not disrupt the upward trend – SocGen

Economists at Société Générale discuss how HICP inflation numbers for the Euro Area could impact EUR/USD.

Soft data could add fuel to the rally in European rates

In the Euro Area, flash core CPI is forecast to have returned below 4% YoY in November for the first time since June 2022. Our economists have pencilled in a drop in headline to 2.6% YoY from 2.9% and core to 3.8% YoY from 4.2%.

Soft data could add fuel to the rally in European rates, but the rally is stretched and potentially due or a correction in December. 

Softer inflation data from the Eurozone should in theory not disrupt the upward trend in EUR/USD, but investors may choose to play the ranges until Nonfarm Payrolls next week.

See – Eurozone HICP Preview: Forecasts from nine major banks, inflation rate falls once again