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The vast majority of retail client accounts lose money when trading CFDs.
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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
Important Notice - Fraud awareness
Important Notice - Scam alert
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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EURUSD Awaits German and US Inflation Numbers

The EURUSD exchange rate awaits the release of inflation data for Germany and the US on Tuesday. 

Inflation from Europe’s largest economy is a final number and is likely to be close to the 10% expected. The US numbers are for November and will be the driver of the exchange rate.

EURUSD Weekly Chart

EURUSD Weekly Chart 1

The EURUSD pair has paused from a recent rally and found resistance at the 1.06 level. That has a high chance of happening, but it will depend on the data.

US dollar strength would have to come from a higher-than-expected inflation rate.

Analysts are expecting to see a drop in inflation from 6.3% to 6.1% for the most recent month. The year-on-year inflation rate is also expected to drop, from 7.7% to 7.3%. An upside surprise would put the US dollar back in command after recent losses. 

German inflation could drop in the coming months due to low-cost public transport tickets agreed to by political leaders, experts said. ING chief economist Carsten Brzeski said the 49-euro monthly ticket, which is an extension of a temporary scheme from the government's first relief package, would act as another brake on inflation. 

During the first quarter of 2023, Brzeski expects inflation to be one percentage point lower than usual thanks to the Deutschlandticket, with a further cap on gas prices set to start for households and businesses. 

"So, with this, we will also reach peak inflation in December," Brzeski said. 

For the United States, inflation has cooled in recent months, and that has seen selling in the greenback with the Federal Reserve stating that it will slow the pace of interest rate hikes. 

US Treasury Secretary Janet Yellen has said that she sees prices much lower at the end of next year as long as there are no unanticipated shocks to the economy. 

The November inflation numbers will be important for the EURUSD pair with the Federal Reserve meeting coming a day later. Analysts expect a 50 basis point rate hike, and traders will try to get a jump on their next steps with the price reading.

Last Updated: 13/12/2022

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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