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EUR/USD falls to a 3-week low

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On Tuesday, the US dollar showed strong gains against majors with the exception of Japan’s yen. EUR/USD is currently trading at 1.0528 in Europe after falling by 1.27%.

Investors eye German CPI

Today’s EUR/USD exchange rate is significantly lower, despite an extremely light economic calendar. German CPI is the only release that should be of concern. It will be released later today. Despite the lackluster fundamentals, the US Dollar is profiting from risk aversion in markets. Everywhere you turn, there are headwinds. The war in Ukraine, the threat of recession in the US and the eurozone and China’s slowdown all make for a gloomy outlook as we start the new year.

Germany’s inflation has been falling, and the downtrend is expected to continue. CPI for December is expected to be 9.0% as opposed to 10.0% in November. If the consensus is correct, it could further put pressure on the euro as the ECB might have to reconsider its hawkish stance regarding rate policy.

The International Monetary Fund didn’t bring any festive cheer with its pessimistic message on Monday. The IMF warned that 2023 will be more difficult than 2022 because the US, EU, and China all would see a decrease in growth. The IMF also warned that one-third of global economic growth would be lost by 2023.



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