The latest report on producer price index (PPI) from Germany has significantly influenced the movement of EURUSD.
In December, the monthly (month-on-month/MoM) PPI in Germany registered a decrease of -0.4% MoM, which is below the forecast indicated by Trading Central of 0.4% MoM and also lower than the previous month’s figure of 0.5% MoM.
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On a yearly basis (year-on-year/YoY), the PPI for December showed a growth of 0.8% YoY, which again fell short of the Trading Central’s forecast of 1% YoY, although it was higher than the growth rate of the previous month at 0.1% YoY.
Following the announcement, EURUSD, which had previously climbed to 1.03188, experienced a correction.
The low PPI growth in Germany highlights the uneven state of the economy within the eurozone. While Germany, one of the major economic players, is facing a slowdown, southern European countries are experiencing commendable growth.
Throughout January 2025, EURUSD is generally under pressure, currently hovering near the lowest point since November 2022. This uneven economic landscape casts a negative sentiment, as Germany, the driving force behind the European economy, is undergoing a decline.
This situation has led to predictions that the European Central Bank (ECB) may cut interest rates again at the end of this month, which will continue to affect the movements of EURUSD.
