The European Central Bank (ECB)’s latest monthly poll of consumer inflation expectations finds that inflation forecasts among Eurozone consumers fell sharply in April.
Additional takeaway
“Economic growth expectations for the next 12 months are -0.8% in April vs. -1.0% in March.”
“Consumers expect nominal incomes to rise more slowly over the next 12 months.”
“Median expectations for inflation over the next 12 months fell to 4.1% in April, down from 5.0% in March.”
“Three-year inflation expectations fell to 2.5% from 2.9%.”
Market Reaction on Consumer inflation
The EURUSD is feeling the tug of gravity as inflation predictions in the old continent decrease. The price of the pair is now 1.0695, down 0.16% on the day.
Moreover after finishing the first trading day of the week largely unchanged. The EURUSD has prolonged its sideways crawl early Tuesday. The pair appears to have established a horizontal trading range of 1.0680 to 1.0750. A significant move out of that channel might set off the pair’s next directional movement.
Furthermore US Dollar lost momentum in the second part of the day on Monday. Allowing the EURUSD to recover. The ISM Services PMI fell to 50.3 in May from 51.9 the previous month. Indicating a slowing of economic activity in the US service sector. Furthermore, the survey’s underlying statistics revealed that input inflation slowed quicker than predicted. But payrolls fell, with the Employment Index falling to 49.2 from 50.8.
