Inflation continues to rise in Europe; euro declines to multi-month lows

The EURUSD pair fell below the 1.13 level yesterday before recovering all the losses as the CPI accelerated higher again.

Eurozone inflation surged 4.1% year-on-year in October; data revealed Wednesday, more than twice the European Central Bank’s target. Nevertheless, the ECB has said several times that it won’t raise rates in the next year. 

At the same time, the equivalent UK number came in at 4.2%, its highest in almost a decade. On the other hand, the BoE is expected to hike rates at its December meeting. As a result, the EUR/GBP cross dropped sharply this week and fell to the lowest level since February 2020.

From other news, oil continues to decline, and it looks like the long-term trend might be over for now. The commodity dropped below 78 USD to one-month lows, with a possible triple top formation at 85 USD, pointing to a further decline to 72 USD.

Elsewhere, US equity futures are rising today, with the Nasdaq 100 index trying to post new all-time highs, while the Dow Jones index underperforms slightly. In Europe, German DAX and French CAC were up again today, rising nearly every day to new records.

Later in the day, the usual Thursday’s US jobless claims are due. Initial claims will likely decline to 260,000 from 267,000 previously. Additionally, the Philadephia Fed Manufacturing Survey for November is expected to improve marginally to 24.

Source: https://www.axiory.com/analytics/market-news/inflation-continues-to-rise-in-europe-euro-decline