-Destatis
Dukascopy traders still believe in bearish scenario on the EUR/USD currency pair, as 64% of opened positions are short. This time such an attitude is justified by weak inflationary pressure from Europe's powerhouse. Inflation is a key concern for European policymakers, as risk of deflation stands around 30%. Therefore, Friday's German CPI added another piece to the puzzle that Mario Draghi and his team will try to solve this week on Thursday.
A report from the German statistics office showed that consumer prices in Europe's largest economy rose only 0.3% in March, from a 0.5% growth in the preceding month and falling short of market's expectations for a 0.4% growth. On a yearly basis the CPI also ticked lower to 1.0% from 1.2% in the prior month and compared to predictions of 1.1%. When calculated using a harmonized method, inflation stood at 0.9%- in line with the consensus forecast. ECB officials have already warned that in case the mid-term outlook for inflation deteriorates further, they will be forced to take actions. However, April's holidays can push price gains higher, suggesting policymakers can postpone the implementations of fresh stimulus.
The only bright spot that suggest the region's economy is recovering is economic sentiment, which came at 102.4 in March following a reading of 101.2 a month earlier, easing some of the pressure on the central bank.
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