Outlook
The euro remains modestly firmer as German inflation cooled faster than expected, keeping the ECB’s policy path intact. A start-of-year contraction in German retail sales could cap gains and keep the euro rangebound. Oil prices near 90-day highs add energy-cost risk for the euro area, weighing on the single currency.
Key drivers
- German inflation cooled faster than expected, supporting the ECB's steady policy stance.
- Germany retail sales may show contraction at the start of the year, acting as a euro headwind.
- Oil prices near 90-day highs around 78.37 add energy-cost risk for the euro area.
- EURUSD around 1.176, inside the 1.1586–1.2031 range.
- EURGBP around 0.8773, inside the 0.8628–0.8799 range.
- EURJPY around 184.2, inside the 180.5–186.2 range.
Range
EURUSD: 1.1586–1.2031 (current near 1.1758)
EURGBP: 0.8628–0.8799 (current near 0.8773)
EURJPY: 180.5–186.2 (current near 184.2)
Brent Crude OIL/USD: 59.04–78.37
What could change it
- Stronger German retail sales or unexpected euro-area inflation data.
- Oil-price moves lower or higher altering energy-cost dynamics for the euro area.
