The Euro has now rallied for a 3rd straight day after hitting parity on the back of strong inflation figures from the Euro zone which has led to speculation the European Central Bank will need to be more aggressive with interest rate hikes in order to reign in prices.
Eurozone’s Inflation surged 8.6 percent in June, on an annualized basis, according to Eurostat’s final reading of the Eurozone Harmonized Index of Consumer Prices (HICP) report for the month of June.
The reading came in line with analysts’ expectations while also remaining the same as the previous month.The core figures followed the same pattern as the annual numbers hitting the market at 3.7 percent, meeting the 3.7 percent market estimates and the 3.7% from last month.
The bloc’s HICP rose by 0.8 percent versus 0.8 percent expected and 0.8 percent first readout while the core HICP numbers came in at 0.2 percent versus 0.2 percent expected and 0.2 percent seen previously.
The European currency’s rally over the las days has been an impressive 260 points which shows there are still plenty of buyers willing to step in when the EUR/USD currency pair approaches parity.
Looking further ahead today, the main drivers of the EUR/USD currency pair will be the release of key data from the US such as the latest building permits figure and housing starts numbers which are predicted to come in under expectations due to rising interest rates in the US which is causing the real estate market to cool off.
If analysts are correct, we may see the Euro continue its rally until the end of the trading day as market participants await key data from the Eurozone and US tomorrow.