FX.co ★ New fears about the dollar

The euro showed excellent growth yesterday and all of this is because of mere rumors about the data that comes out today. It is significant that the pound remained virtually unchanged although the growth of the euro, through the index of the dollar, had to spur it on. The case was about the weak statistics from the UK, where inflation remained at 3.0% against expectations of growth to 3.1%. In continental Europe, statistics were better. The preliminary estimate of GDP for the third quarter coincided with the forecasts and showed that the EU maintained its economic growth rate at 2.5%. Also, despite the slowdown in industrial production growth from 3.9% to 3.3%, the data were better than expected.

Nevertheless, despite the acceleration of producer price growth in the US from 2.6% to 2.8%, the dollar has weakened, at least in relation to the euro. The fact is that many have revised their forecasts on today's inflation data. They now expect its slowdown below 2.0%. This immediately gave rise to concerns about the prospects for a December increase in the Fed's refinancing rate. In general, US statistics are expected to be extremely weak today and even if inflation data coincides with the main forecast, slowing from 2.2% to 2.0%, this will only slightly correct the picture. Along with a slowdown in inflation, retail sales are expected to slow from 4.4% to 3.0%. This combination is extremely unpleasant.

The growth of the EUR/USD pair is limited by yesterday's growth so at best, the pair is stabilizing at the level of 1,1800.

The GBP/USD pair has much more chances for growth, especially as today's data on the labor market can be moderately optimistic. The pound will grow to 1.3225, and then to 1.3275.