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Renewed Selling Pressure on Euro Forex Market

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  • Fresh Lows for Euro on Inflation Fears
  • GBP Also Suffering with US Data to Come
  • Wall Street Looks to Avoid Negative Week

It has been a challenging end to the week for the Euro forex market. The common currency sits close to its lowest point since the beginning of 2020 as Dollar strength on hot inflation numbers remains the key talking point. The Euro is not alone in its struggles. Sterling is also under heavy selling pressure approaching the weekend despite a more optimistic outlook on the Brexit issues that have plagued the currency of late. US consumer confidence data is next on the agenda with figures coming later today. Traders on Wall Street will also be looking to these for some positivity to end the week.

Inflation Concerns Weigh on Euro

Data from the Euro area showed less of a drop-off in industrial production for September than had been expected by analysts. This has been of no comfort to those forex trading the Euro, however. The currency has dropped to a new low for this year, and actually, its lowest point since January 2020. 

This is another bearish move for the Euro during a period where it has seen little in the way of positive movement as Dollar strength has continued. The latest dip has been caused mostly by stronger than expected US inflation data that has driven traders to the safe haven Greenback. The ECB has also acknowledged that inflation has moved higher, and lasted over a longer period than had initially been expected. Still, with no very negative news on the Euro side, most analysts are pointing to it being oversold according to technical indicators. 

Pound Also in Turmoil

Forex brokers have seen a decline not only in the fortunes of the Euro, but also in their neighbors across the water in the UK. Sterling is also struggling below 1.34 at a point which is an 11-month low for the British currency. This downward momentum comes even as more positive sounds are coming from both the EU and British Government on resolving their ongoing Brexit row. 

The focus for both the Pound and Euro will now shift to the Michigan Consumer Sentiment Index on the US docket. This forward-looking number will project expectations for November with the number set to rise slightly although this is no great achievement with the average for this index in recent months sitting at a decade low. 

Stocks Attempt to Dodge Negative Week

Wall Street has also felt the impact following the renewal of the inflation concerns that had dogged the market in earlier months but lifted slightly of late. The Dow Jones is trading up slightly in the pre-market, with both other major indices following suit. 

This comes after a Wednesday that delivered the hottest CPI numbers since 1990 with a 6.2% increase on a year previous. All things considered, stocks have gotten away fairly unscathed with markets trading down for the week, but still very close to record numbers.

Anthony is a financial journalist and business advisor with several years’ experience writing for some of the most well-known sites in the Forex world. A keen trader turned industry writer, he is currently based in Shanghai with a finger on the pulse of Asia’s biggest markets.

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