Last week, the Euro pair was volatile as the market mirrored the strong inflation data from the US. The data showed that consumer prices rose by 4.2% in April while the producer price index rose by 6.2% in the month. This increase was larger than what most analysts were expecting. It even stunned some Fed officials, including Vice President, Richard Clarida, who believes that the figure was temporary.
This week, the pair will react to the latest Eurozone GDP data that will come out today, Tuesday. Analysts anticipate that the numbers will show that the EU GDP declined by 0.6% in the first quarter, leading to a 1.8% year-on-year contraction. The figure will come a few days after the European Commission increased its forecast for the bloc. It expects the economy to bounce back by 4.2% in 2020 and by 3.8% in 2022.
The EURUSD will also react to the latest inflation data from the Eurozone that will come out on Wednesday. Based on the estimate released two weeks ago, analysts expect the data to show that the headline CPI rose by 0.6% on a MoM basis and by 1.6% on a year-on-year basis. The core CPI is likely to have risen by 0.6% on a YoY basis.
The EURUSD will be also affected by the latest data from the United States like housing starts, building permits, and initial jobless claims numbers.
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