The Euro took a nosedive today as the US dollar strengthened across the board. As expected, inflation in Germany held at a 12 year high with consumer prices rising by 3.3 percent last month (the EU Harmonised rate was 3.4 percent). It is encouraging that inflation did not continue to rise and given the trend in food and energy prices over the past month, we may have seen the high in CPI. French consumers are joining their German counterparts in growing more pessimistic about the outlook for growth. Tomorrow, we are expecting consumer confidence for the entire Eurozone as well as retail PMI. Given the recent trend of Eurozone economic data, we expect more disappointments. We could just be at the beginning of a major dollar rally. According to our Technical Analyst Jamie Saettele, not only is the Euro headed below 1.55 but the target for this latest wave of weakness is 1.5283. Meanwhile the Swiss economy is headed in a completely different direction. The UBS Consumption Indicator rebounded strongly in June, to the highest level in 4 months.
