Eurozone Inflation Makes Another All-Time High

 | Aug 31, 2022 10:21AM ET

Today the EU has confirmed that inflation in the Eurozone has again hit an all-time high across the 19 member states. inflation in the region increased by 9.1% Y/Y above previous estimates.

Many economists are considering whether this strengthens the case for the European Central Bank to consider a higher rate hike.

The Euro is performing well against most of its competitors other than the US Dollar. This is due to the recent hawkish stance by the Fed and the US's improved economic performance.

h2 US Dollar Index - Technical View/h2

The US Dollar Index is increasing in value after a slow start. Currently, the price is 0.29% higher than the market open, taking the index to 109.8. The index is at the highest price in the last 48 hours.

The US Dollar is likely to continue being influenced by the recent comments from the Federal Reserve until the next Consumer Price Index (CPI) announcement.

The Dollar may find support if the August figure indicates that inflation has not necessarily peaked. At the same time, a lower inflation figure may have investors feeling more relaxed. This is also likely to affect the US Stock Market.

Investors are also awaiting the release of this week’s nonfarm payrolls and Unemployment Rate. Both can create high levels of volatility but will not likely change the stance of the Fed’s monetary policy.

The Central Bank has indicated that the employment sector is robust and can slightly decline without causing an issue for the economy.

h2 Turkish Lira - Technical View/h2

The USD/TRY continues to be one of the most shorted currencies as it has been since 2017. The currency has been influenced by multiple factors which generally have worked against the currency.

This includes political tensions, an unstable monetary policy, and hyperinflation. Turkey is currently the only European country experiencing hyperinflation, which lowers the currency’s purchasing power.