The EUR/USD pair rose for the third straight day as investors reacted to the latest Eurozone consumer inflation data. The pair rose to a high of 1.1312, which is about 1.70% above the lowest level in January.
Eurozone inflation
Consumer inflation in the Eurozone continue rallying in January this year. According to Eurostat, the headline consumer price index (CPI) rose from 5.0% in December to 5.1% in January. This increase was better than the median estimate of 4.4%. In total, the price of the basket used to track the CPI rose from 110.37 euros to 110.74 euros.
Meanwhile, the core CPI eased from 2.6% to 2.3%. It rose from 0.4% to 1.6% on a month-on-month basis, signaling that food and energy prices were the biggest catalyst for inflation.
Therefore, these numbers show that the bloc’s inflation has been holding steady in the past few months.
In addition to energy prices, the CPI jumped because of the ongoing supply shortages and rising wages. Still, recent data and company announcements show that these supply chain challenges are easing.
Why the EUR/USD jumped
The EURUSD pair has risen because of the ongoing stream of positive data from the Eurozone.
In addition to the rising inflation, recent data showed that the bloc’s unemployment rate declined to the lowest level on record of 7.0%. The decline is a sign that the bloc’s labour market has recovered at a faster pace than what analysts were expecting.
Another number revealed that the bloc’s GDP expanded strongly in the final quarter of 2021. This increase was mostly driven by the strong performance of the Spanish, French, and Italian economies.
Therefore, the EUR/USD rose because the numbers came a day before the first European Central Bank (ECB) decision of the year.
The strong numbers mean that the ECB will likely start to sound more hawkish than in the previous meetings.
The post EUR/USD: Here’s why the euro is surging this week appeared first on Invezz.
Source: https://invezz.com/news/2022/02/02/eur-usd-heres-why-the-euro-is-surging-this-week/