Today, important macro-economic statistics of the UK, Germany, Eurozone and the USA will be released. Volatility in the foreign exchange market is expected to be high. After 11:30 (GMT+3) British indices of retail and consumer prices, and producer price index for July will be released; at 12:00 PM ZEW index of business sentiment and expectations in Germany and the Eurozone for August will be known and trade balance of Eurozone in June.
Last Friday, important macro-economic statistics of Eurozone was published, which showed that European GDP in Q2 has grown by 0.3% against the previous quarter and by 1.6% on annual basis. The data met expectations. According to the others news released last Friday, German GDP has grown by 0.4% against the previous quarter.
Consumer price index (CPI) in France fell by 0.4% in July against the previous month and rose by 0.2% compared with July 2015. Consumer price index (CPI) in Italy fell in July by 1.9% against the previous month and by 0.2% compared with July 2015. According to the data released at the end of last month, French GDP in Q2 showed zero growth compared with the previous quarter, while GDP of Spain has grown by 0.7% after the rise of 0.8% in Q1.
It is expected that ZEW indices will show recovery in business sentiments, which have deteriorated after Brexit. If it happens, the Euro will go up.
On the other hand, weak US data on retail sales in July, GDP in Q2 and labor productivity, which was released last week, has reduced the likelihood of the interest rates increase in the USA in the coming months. This fact may cause the decline in the USD.
European economy is losing momentum, especially became obvious especially Brexit and the number of terrorist acts in Europe.
Although interest rate in Eurozone has been lowered to the record lows and asset purchase program has been expanded, inflation in the Eurozone is below the target level of 2%.
These factors increase possibility of expansion of stimulus measure by the ECB this year, which will put additional pressure on the Euro.
On Thursday at 14:30 (GMT+3) the minutes of the ECB meeting in July will be released. Market participants try to find indications of the plans of more monetary policy easing in Eurozone in September.