July’s preliminary Eurozone inflation data may influence ECB rate hike expectations for September amid rising price pressures in Germany and France.
The Euro holds near six-week highs above 1.1500 USD, poised for a 1.3% weekly gain, its strongest performance in nearly four months. Investors are focused on July’s preliminary Eurozone inflation figures, which could shape expectations for a European Central Bank rate hike in September.
Eurozone GDP growth exceeded forecasts in the second quarter, rising 0.4% quarter-on-quarter and 1% year-on-year. However, inflation remains a concern, with July’s Harmonized Index of Consumer Prices expected to rise to 2.9% YoY from 2.8% in June. Core inflation is projected to hold steady at 2.8%, still above the ECB’s 2% target.
Preliminary data from France showed inflation accelerated to 2.4% YoY in July, up from 2% in June, while Germany’s HICP rose to 2.8% from 2.4%. The figures underscore persistent inflationary pressures, reinforcing bets on further ECB tightening.