Germany’s final inflation numbers brought no change to the headline number published previously with November unchanged at 2.2% year-on-year. EUR/USD bounced down after touching 1.060 yesterday with a close at 1.055, indicating some willingness to go lower after some positioning adjustment in recent days, ING’s FX analyst Chris Turner notes.

Waiting for the ECB to show the next direction

“Industrial production in Italy is also unlikely to make much difference to ECB pricing for Thursday’s meeting. Here, a 25bp rate cut seems a done deal for the market, although our economist believes the press conference may open up the discussion for more cuts later, implying a dovish outcome for EUR.”

“In the headlines today we could see the results of the two-day Eurogroup meeting of finance ministers. Otherwise, it should be a quiet day similar to yesterday with the focus on Thursday’s ECB meeting. Still, given some rebound in US rates while the EUR side remains muted, we saw some widening of the rate differential yesterday after more than a week of tightening spreads, indicating some reversal in EUR/USD.”

“The pair bounced down after touching 1.060 yesterday with a close at 1.055, indicating some willingness to go lower after some positioning adjustment in recent days. However, for more action here we will have to wait for Thursday’s ECB meeting, which should show the next direction.”