Disapointing flash CPI from the Eurozone caused the EUR selling. Ahead of the ECB’s meeting markets are especially vigilant on such piece of data. Markets main focus now will be the ADP report and the speech by J.Yellen. Obviously tommorow’s ECB meeting is going to be crucial and will determine the trend on the EURUSD over the medium term.
Today’s reading definitely gives fuel to Draghi’s campaign to step up stimulus, all eyes are now on the ECB’s president and his response. Today’s poor reading follows a series of reports from manufacturing to unemployment proving the sligh improvement in the economy partially due to the ECB’s meeting. But inflation hasn’t been in line with the ECB’s goal 2% since early 2013, and forecasts in September signaled it wouldn’t return there until late 2017.