ING: Strong inflation in the eurozone may boost the euro, but gains are expected to be limited

Chris Turner, an international foreign exchange analyst at ING, said that the preliminary inflation data for December in the euro area will be released today, and if these data are as higher than expected with the German inflation data released on Thursday and dampen expectations of a rate cut by the European Central Bank, it may boost the euro. He said the Eurozone December CPI data, which will be released today, seems to be a good excuse to reprice the Central Bank’s 2024 easing cycle and should provide some support to the euro. However, the EUR’s gains are likely to be limited, given that expectations of fewer rate cuts are likely to dampen risk appetite.