The U.S. Dollar is trading in weaker ranges against its European counterparts after stronger than expected economic figures.
Nevertheless, the same story applies for the U.S., but American consistency is being overshadowed by a decline in equity markets. The Euro is benefitting tremendously from the mix of good data and its return as a safe-haven in the midst of downward markets.
Producer Price Index numbers in the month of October on the U.S. side grew 0.4%, even when excluding food and energy costs, exceeding the estimated 0.1%. On an annual basis, the pace of PPI stands at 2.8% over the 2.4% forecast. The solid numbers do not impact the greenback at the moment, but there is plenty more left for the week that could indeed. Focus will now shift primarily to any progress in the fiscal legislative agenda.
The Euro reached its highest level in over three weeks after German Gross Domestic growth for the third quarter expanded at 0.8%, above the expected 0.6% pace. Inflationary data also came in as estimated, but the surprise came in from Italy where GDP is expanding at a 1.8% annual pace.
As it has occurred throughout 2017, dollar momentum has been stopped by ongoing progress in the euro-zone. Despite earlier political distractions, the shared currency merits appreciation as its economic reality gets rosier and stable.
The Pound remains in danger of further losses based on the political drama that has ensued over the failures in Brexit negotiations to put forward a deal and pay a final bill. Prime Minister Theresa May is having difficulty keeping her cabinet in line and is at risk of losing support from majority of her party.
Furthermore, economic numbers are slipping after PPI data revealed a slowdown in output while CPI failed to meet expectations. Any driver of Sterling strength developing will be a surprise.