May 29, 2024 08:57 GMT
FOREX: EUR/GBP Breaks to New Lows on Soft Regional German CPIs
FOREX
- The single currency is softer against all others, slipping on the back of the lower-than-forecast monthly regional CPI prints from Germany. EUR/USD opened a gap of over 50 pips with yesterday's high upon release, but perhaps more notably the data helped open a further downside leg in EUR/GBP, which broke below key support at 0.8493 to print the lowest level since mid-2022.
- These moves open losses toward 0.8454, the 76.4% retracement for the Mar 7 - Sep 26 2022 bull phase.
- Weaker US equity futures have done little to underpin the JPY, which sits slightly firmer on the day, but well within recent ranges. However, SEK trades more poorly as EUR/SEK gravitates back toward the 200-dma of 11.4966 - a level pierced into the close yesterday.
- Focus for the remainder of Wednesday trade is on the preliminary German CPI print for May, at which markets are on watch for downside risks given the seemingly soft turnouts from the regional monthly prints. MNI projects the national CPI broadly inline with expectations, but a lower-than-expected M/M print at 0.0-0.1%.
- Outside of German CPI, Richmond Fed manufacturing data and an appearance from Fed's Williams are also due, ahead of the latest Beige Book from the Fed.
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