The Euro stays at the back foot in Thursday’s early European trading on stronger dollar and release of inflation data from European countries.
Spanish CPI fell below the forecast in March (2.1% actual vs 2.7% consensus), with releases of inflation from some German states being also below previous month’s values in March.

Key release for the single currency today will be German inflation data at 12:00 GMT. Forecasts for March at 0.4% m/m and 1.9% y/y are below previous month’s releases at 0.6% and 2.2% respectively.
Release at or below consensus would intensify pressure on the Euro and also signal weaker numbers in Eurozone’s CPI, which is due on Friday.

Another key release today is US GDP report. Forecast for the fourth quarter’s final reading stands at 2.2%, above previous two readings at 1.9%.

The outlook is positive and would further support the dollar on better than expected outcome, however, overall picture for the fourth quarter is showing a slowdown in comparison to 3.5% growth in the third quarter.

The US dollar holds firm tone against the basket of majors this week, as the dollar index recovered from weekly low at 98.66 to psychological 100.00 level that was hit on Thursday.

The greenback regained ground after Monday’s sharp fall on failure of President Trump’s health care plan, boosted by renewed optimism over the strength of the US economy and comments from Fed officials suggesting that the US Central Bank will continue to tighten monetary policy.

In addition, upbeat releases of US economic indicators during this week, added on dollar’s strength.
US Pending Home Sales increased by 5.5% in February, which is more than double of 2.4% forecast and negative release in January.

Also, US Consumer Confidence showed upbeat results on surge to nearly 17-year high at 125.6 in January, compared to 113.00 forecast and 114.8 in December.

German CPI                                                                                               US GDP