The EUR/USD pair exchange rate remained muted as the Eurozone inflation slowed, leaving the pair trading around $1.1025.
The single currency was under pressure as the Eurostat revealed its earlier estimate for the bloc’s inflation was accurate, showing inflation slowed in October.
Energy prices in the Eurozone slumped by 3.1%, which offset the 1.5% increase recorded for alcohol, food, and tobacco products.
European Central Bank (ECB) watches closely the inflation indicator. The ECB confirmed a narrower inflation indicator to increased at 1.2%, unchanged from September’s reading.
The European Union Statistics office also revealed that the Eurozone bloc posted a larger trade surplus, as exports grew more than imports.
The U.S. -China optimism support the U.S. dollar
On Friday, fresh U.S.-China trade hopes supported the U.S. dollar despite the release of new details on talks.
Larry Kudlow, the White House advisor, said the U.S. and Chian were getting close to a deal.
Commenting on the same, Terence Wu- treasury secretary at OCBC Bank in Singapore said the deal could be a game-changer. “We think any reversal in the risk-off trades may not see a good shelf-life,” Terence said.
However, throughout the week, there have been mixed signals on trade. Evidence of the toll it has taken on the global economy has mounted.
Financial Times has also reported that an agreement may not be reached in time to avoid the fresh round of tariffs scheduled for Chinese goods on 15th December.
European Union is awaiting a decision from Trump’s decision 25% tariffs on U.S. auto imports
Automakers in the European Union are waiting to see whether Trump will impose a 25% tariff on U.S. auto imports.
Discussing on Wednesday, Trump said he would make the decision fairly soon.
EUR/USD Outlook following the release of the U.S. retail sales
Looking ahead to this afternoon, the USD could rise against the EUR following the release of U.S. retail sales.
If sales increase more than what was expected in October, in an optimistic sign for the American economy, the USD sentiment is also likely to rise.
However, the disappointing U.S. industrial production could limit any gains and leave the pair flat again.
If industrial production slumps further than the forecast in October, then it will likely leave the EUR/USD exchange rate muted.