Weekly euro fundamental forecast
There is safety in numbers. The Bank of England decided to challenge this vital principle. Due to the BoE bond purchases, not only the pound but also other European currencies began to grow. The EURUSD upward correction was also supported by the news that Germany’s inflation has reached double digits for the first time over the past 70 years. The European Central Bank is ready to hike the interest rates aggressively, and the government is not far behind. Germany introduces a ceiling on gas prices, to maintain which it is ready to spend €200 billion. Will this be enough?
For the first time since 1951, German inflation reached 10.9% annually. +2.2% monthly looks like a huge figure. The main reasons given are the expiration of temporary measures to protect households and businesses from the impact of high prices, as well as energy products. The cost of the latter accelerated from 35.5% to 43.3% in September.
Dynamics of Germany’s inflation
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