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EUR/USD Update – German Inflation Seen Slowing for First Time Since April



Good day forex traders and readers.

As we head into the second day of the new trading week, the EUR/USD remains in a narrow trading range. As mentioned, anticipation and apprehension regarding the FOMC event will probably weight down on market activities.

As of the moment, 1.3280 remains likely to be an immediate resistance. I am expecting little deviation of the currency pair unless unexpected events occur. Possibility volitatlity may occur when we head closer to the economic event.

In the meanwhile, the Bloomberg report below suggests continued low interest for the Euro Zone which is likely to weight down on the euro currency :

German inflation probably slowed in July for the first time in three months, signaling price gains in Europe ’s largest economy remain subdued.

Germany’s consumer price index , calculated using a harmonized European Union method, rose 1.8 percent from a year ago, compared with 1.9 percent in June, according to the median of 24 estimates in a Bloomberg News survey . Prices probably climbed 0.1 percent on the month, the survey shows. German states are scheduled to report inflation data throughout today before the Federal Statistics Office in Wiesbaden publishes national figures at 2 p.m.

“Inflation is under control and inflation expectations are firmly anchored, both in Germany and the euro area,” Kristian Toedtmann, an economist at Dekabank in Frankfurt , said by phone. “If anything, risks to the rate are on the downside.”

The Bundesbank forecasts German inflation will average 1.6 percent this year and 1.5 percent in 2014. The Frankfurt-based central bank reduced its 2013 growth projection for Germany last month to 0.3 percent from the 0.4 percent it predicted in December, citing a worse-than-expected first quarter and warned that Europe’s sovereign debt crisis still poses risks to the economic recovery.

Consumer price gains in the 17-nation euro area accelerated to 1.6 percent in June from 1.4 percent the previous month and 1.2 percent in April as energy prices rebounded, data from the European Union’s statistics office in Luxembourg showed July 16. Data for this month will be published on July 31. The European Central Bank last month cut its 2013 inflation forecast for the region to 1.4 percent from 1.6 percent and left the 2014 estimate unchanged at 1.3 percent.

Of 63 economists in a Bloomberg News survey , 62 expect the ECB to keep its benchmark interest rate at a record low of 0.5 […]

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