Eurozone inflation data to shape ECB policy and EUR/USD outlook

Recent developments in the Eurozone’s inflation trends are set to significantly influence the European Central Bank’s (ECB) monetary policy decisions. Germany, a key player in the Eurozone, is poised to release its September inflation data, which is expected to reveal a 4.5% year-on-year (YoY) rise in the Consumer Price Index (CPI).

Spain has already released its national August inflation figures, while North Rhine-Westphalia’s September inflation data could provide insights into Germany’s overall inflation scenario. The forthcoming Eurozone Harmonised Index of Consumer Prices (HICP) inflation figures will be crucial to the ECB’s monetary policy review.

Deutsche Bank anticipates a considerable decrease in both headline and core inflation prints for September. This potential drop could influence the exchange rate.

ECB President Christine Lagarde has projected continued high price growth despite recent decreases. She cited escalating oil prices as a possible factor affecting inflation trends.

The article also underscores the divergent monetary policies of the US Federal Reserve and the ECB, mentioning the looming risk of a Eurozone recession. Furthermore, it discusses the impact of trade balance on currency value and provides a technical outlook for EUR/USD.

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