The European Commission released its winter forecast.
The report was slightly optimistic, pointing to a path of steady but moderate growth. The growth projections were unchanged.
The economy is forecast to grow at a rate of 1.2% both this year and in 2021 as well. Inflation forecasts were raised from 1.2% to 1.3% for this year.
Germany Inflation Falls 0.6% in January
The final inflation figures for Germany for January saw consumer prices falling. The decline was that of 0.6% during the month and was in line with the flash estimates.
Despite the decline, on a yearly basis, inflation hit a six-month high as CPI rose 1.7% on the year.
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EURUSD Loses Support, Declines Further
The common currency failed to hold on the support area near 1.0897 and fell to a fresh yearly low. Price action remains biased to the downside amid the fundamentals also supporting this view.
The declines also mark a new low since mid-2017. With the downtrend in place, only a break of the falling trend line can confirm a shift to the upside.
US Inflation Rises in January
Consumer prices in the United States rose slightly in January. The gains came on the back of higher food and shelter prices while offsetting a drop in gasoline prices.
Data from the Labor Department showed that consumer prices rose 0.1% in January, following a 0.2% increase in November.
Gasoline prices fell 1.6% during the month. Core CPI also rose 0.2% following a 0.1% in the month before.
GBPUSD Swings to the Upside
The British pound caught a bid as price action swung to the upside. After clearing the key price level of 1.2960, GBPUSD is soaring higher.
However, the gains could be limited to the falling trend line. In the near term, the declines could stall near the 1.2960 region, where support could be found.
Investors Cautious as China Confirms Higher Coronavirus Cases
Equity markets took a pause amid news of China reporting a higher number of coronavirus cases. This comes as Chinese authorities changed the process which now includes “clinically diagnosed” people as well.
All major equity markets reacted negatively to the new numbers while there was a modest flight to safety.
XAUUSD Clears Resistance, but Will it Hold?
The precious metal maintained a bullish momentum which finally allowed price to break past the resistance area of 1573 – 1569. Given that the Stochastics is well overbought, there is doubt if the bullish streak can be maintained.
If prices slip back below this level, we expect the declines to continue.
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