Strong sale of the euro against the dollar

Today, the euro is under considerable supply pressure, which is the result of published macroeconomic data from the countries of the common monetary zone. In addition, we are observing a strong dollar, which is losing, among others, the last star of the currency market, the Polish zloty. However, this is not the end of today's emotions, because there is still more to come a lot of macroeconomic readings.

The ECB will not be more hawkish

The day started quite solidly with data from Germany showing retail sales growth at the level of 1,1% m/m for October. It was still an annual decline of -0,1% y/y, but much smaller than expected. Unfortunately, poor data reached us from France. Ultimately, GDP for Q3 contracted by 0,1% q/q, although growth of 0,1% q/q was expected. Inflation from this country was also lower: 3,4% y/y for November, with the expected 3,7% y/y and with the previous reading 4,0% y/y.

Lower inflation is part of the trend started yesterday by other key EMU economies, i.e. Spain and Germany. As you can see from the data, there is basically no way to do that EBC was more hawkish at this point, and therefore there are no stronger grounds for strengthening the euro. It is worth mentioning that PMI indices remain below 50 points, which means a potential recession in the euro zone countries.

Interestingly, we are also seeing this today clear strengthening of the dollar. This translates into a downward movement on EUR/USD of almost -0,5%! Today the dollar will receive another series of data, after yesterday's very strong GDP. Today we will learn PCE inflation, the Fed's preferred indicator. PCE inflation general is expected to drop to 3,0% y/y, while PCE Core to 3,5% y/y. On a monthly basis, we will see slight increases of 0,1% m/m and 0,2% m/m, respectively.

Opec+ meeting as planned

In addition, we will also learn about applications for unemployment benefits, data on Americans' expenses and incomes, and data on house sales on the secondary market. However, the decision will also be an important event OPEC + about the level of production targets for individual countries. Although there was speculation about another postponement of the meeting due to the lack of consensus, recent reports indicate that the meeting is scheduled to start at 13:00 p.m. Polish time as scheduled.

The zloty is losing today, although we have received a series of really good data from Poland. CPI inflation fell to 6,5% y/y from 6,6% y/y, which was more or less in line with expectations. On the other hand on a monthly basis, prices increased by as much as 0,7% m/m, which may be a worrying factor, although of course it may be largely due to fuel prices. In the case of GDP it is also better! GDP grows quarterly by 1,5% q/q and annually by 0,5% y/y, which is slightly higher than the preliminary data indicated.

Just after 10:00 we had to pay PLN 3,9771 for the dollar, PLN 4,3449 for the euro, PLN 5,0380 for the pound and PLN 4,5450 for the franc.

Source: Michał Stajniak CFA, XTB