EUR has found support. Overview for 18.01.2024

The primary currency pair steadied on Thursday after a previous decline. The current EURUSD exchange rate stands at 1.0893.

The flow of statistics published yesterday prompted the market to adjust its perspectives.

In December, final inflation in the eurozone reached 2.9% y/y, marking a significant acceleration from the previous 2.4%. Although the data aligned with forecasts, it failed to ease market concerns – there is a possibility that prices may be rising again.

In the US, industrial production increased by 0.1% m/m in December, following no changes in November. On an annual basis, the indicator rose by 1.0%. The capacity utilisation rate in the US for December stood at 78.6%, unchanged from November.

Retail sales volume expanded by 0.6% m/m in December, surpassing the expected 0.4%. On a year-on-year basis, retail sales increased by 5.6%.

Here comes the most crucial part: the pro-inflationary signal is gaining strength, pointing to a potential future price acceleration. Consumers are managing high interest rates well, having adapted to them and spending easily.

It seems the Federal Reserve will need to consider any decision to reduce the cost of lending carefully.