Will US inflation data break the recent narrow trading ranges?
Yesterday’s action on the currency markets was once again confined to very narrow ranges with no major data releases to generate any reaction on the exchanges. Italian industrial production was the only release of note, which printed below expectations.
As we get underway this morning, the euro continues to hold onto its post-ECB firmer tone. This is reflected in EUR/USD remaining above the $1.14 mark and EUR/GBP continuing to hold its line in the 84p territory. Elsewhere, GBP/USD once again starts the European session near to the midpoint of the $1.35-1.36 trading band.
As we look to the day ahead, once again the European macro schedule remains sparse, so barring any major surprises, a quiet trading day is expected. Across the pond however, we do get an important data update with the release of CPI inflation figures for January. After rising to a 40-year high at the end of 2021, inflation is expected to have accelerated further at the start of the year, to 7.3%.