EUR/USD remains capped under the 1.1000 barrier, focus on German PPI data

• EUR/USD loses its recovery momentum around 1.0973 in Wednesday’s early Asian session.
• The Eurozone HICP for November came in at -0.6% MoM vs. -0.5% prior, weaker than expected.
• The US housing data showed mixed readings on Tuesday.
• Market players will focus on the German Producer Price Index (PPI), and US Existing Home Sales.

The EUR/USD pair trades with mild losses and remains capped under the 1.1000 psychological mark during the early Asian trading hours on Wednesday. The upside looks favorable for the major amid the US Dollar (USD) weakness. EUR/USD currently trades near 1.0973, losing 0.04% on the day.

Data from Eurostat on Tuesday showed that Eurozone inflation missed market expectations in November due to the fall in energy prices. The Eurozone Harmonized Index of Consumer Prices (HICP) for November came in at -0.6% MoM versus -0.5% prior, weaker than expected. The annual euro area inflation arrived at 2.4%, in line with analyst expectations. The Core HICP figures, which exclude volatile food and energy prices, came in at 3.6% YoY, the lowest reading since April 2022.

The European Central Bank (ECB) stated after its recent monetary policy meeting that the central bank did not discuss rate cuts at all while warning that inflation could spike again in December due to colder weather, which increases energy demand and prices. This, in turn, might cap the upside of the Euro (EUR) and act as a headwind for the EUR/USD pair.

Across the pond, Building Permits fell to 1.46M in November from 1.498M in October, weaker than the market estimation of 1.47M. Housing Starts rose to 1.56M in November from 1.359M in the previous reading, above the consensus of 1.36M, the US Census Bureau revealed on Tuesday.

Later on Wednesday, traders will focus on the German Producer Price Index (PPI) for November, Eurozone October’s Current Account, Construction Output, and December’s Consumer Confidence. On the US docket, the Existing Home Sales will be released.