The preliminary set of June’s German Consumer Price Index figures headline the economic calendar in European hours. Expectations call for the annualized inflation rate to tick lower for the second consecutive month to print at 1.8 percent, the lowest since December 2010. The outcome may prove to weigh on the Euro as being inflationary pressure against a backdrop of slumping regional economic growth opens the door for building ECB rate cut expectations.
Separately, German Chancellor Angela Merkel is due to address the Bundestag (lower house of the legislature) on her goals for the two-day EU leaders’ summit due to begin on Thursday. Concrete policy proposals are unlikely to emerge. Still, traders will be keen to gauge the Chancellor’s tone amid concerns that Germany represents the most significant obstacle forging a Eurozone-wide debt obligation-sharing scheme meant to boost confidence and help arrest the region’s debt crisis.
The US Dollar was little-changed against its top counterparts in overnight trade. The New Zealand Dollar underperformed, slumping as much as 0.2 percent on average, after the May Trade Balance report showed that the year-to-date deficit widened to -NZ$805 million. That marks the second consecutive month in negative territory and the largest shortfall since November 2009.
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