The Euro edged higher against the U.S. Dollar on Monday, with the EUR/USD pair surpassing 1.0950 as markets turned their attention to the upcoming release of Germany’s Industrial Production data. Investors are cautiously positioning ahead of the report, which is expected to shed light on the strength of Germany’s manufacturing sector and the broader Eurozone economy.
Despite concerns over inflation and sluggish growth in Europe, the Euro found support amid anticipation that the data could reveal smaller-than-expected declines in industrial activity. Should the report beat estimates, it may provide a further boost to the Euro, potentially pushing the currency higher against the Dollar.
Meanwhile, the U.S. Dollar continued to face downward pressure as investors weighed the future course of Federal Reserve policy. Although U.S. inflation remains elevated, recent economic data has increased speculation that the Fed may slow the pace of its rate hikes, diminishing the Dollar’s appeal relative to other currencies.
As markets brace for the German data, EUR/USD is likely to experience heightened volatility. A stronger-than-expected report could lift the pair closer to the 1.1000 mark, while a weaker outcome may prompt a retreat.
For now, all eyes remain on Germany’s industrial performance, as it holds significant implications for the Eurozone’s economic outlook.
