Euro in cautious retreat ahead of inflation data in Spain and Germany

The euro fell at the European open on Thursday against a basket of global currencies, giving up a one-week high against the US dollar, as corrections and profit-taking activity continued. The decline remained within a narrow range as investors await important data on inflation levels in Spain and Germany in November.

The data comes a day before key eurozone inflation data for November is due to be released. It will shed light on how much inflationary pressures are weighing on policymakers at the European Central Bank, providing crucial clues about whether to cut European interest rates in December.

Price overview

Euro exchange rate today: Euro exchange rate today: The euro fell against the dollar by about 0.2% to ($1.0547), from the opening price of trading at ($1.0565), and recorded a high of ($1.0569).

The euro ended Wednesday's trading up 0.75% against the dollar, in the second gain in the last three days, and the largest daily gain since August 2, and recorded the highest level in a week at $1.0587.

Beyond continuing its recovery from two-year lows, the euro rose after aggressive comments from a European Central Bank official.

aggressive comments

European Central Bank Governing Council member Isabel Schnabel told Bloomberg on Wednesday that interest rate cuts should be gradual and move to neutral territory rather than accommodative.

European Interest Following the above comments, the pricing of the probability of the European Central Bank cutting European interest rates by about 25 basis points next December decreased from 90% to 65%.

In order to reprice these possibilities, traders are awaiting the release of key inflation data in Spain and Germany for November at successive times today.

Key inflation data

Key inflation data for the entire eurozone for November will be released tomorrow, Friday, which will provide crucial clues about the likelihood of a European interest rate cut at the meeting on December 12.

Euro Performance Forecast Here at FX News Today we expect: If inflation data in Spain and Germany come in hotter than expected in the markets, the chances of a European interest rate cut in December will decline, which will favor further appreciation in the euro exchange rate against a basket of major and minor currencies.