The Euro will look to comments from ECB President Mario Draghi to guide forex traders’ interpretation of German ZEW and region-wide CPI data.

Talking Points

• Euro Looks to Draghi Comments as Filter to Interpret German, EZ Data
• British Pound Unlikely to Find Market-Moving Cues in Flat Inflation Reading
• Dollar and Yen Retreat, Kiwi Outperforms as Markets Digest Risk Aversion

TheGerman ZEWSurvey of investor confidence headlines the economic calendar in European trading hours. The report is expected to show sentiment deteriorated for the first time in five months. Meanwhile, year-on-year Eurozone CPI is seen ticking downward to 1.7 percent, the lowest since August 2010.

While such outcomes amplify the case for added ECB stimulus, ample evidence to this effect has already proven ineffective at swaying the central bank to step up easing over recent months. This means the Euro is unlikely to find a lasting driver in either data point absent clear-cut cues in favor of more accommodation from ECB President Mario Draghi when he speaks in the European Parliament later in the day.

Separately,UK Consumer Price Index figures are forecast to put the headline year-on-year inflation rate at 2.8 percent in March, unchanged from the prior month. A print in line with expectations is unlikely to offer an impetus for British Pound volatility in that it would mean relatively little for BOE policy expectations.

The US Dollar and Japanese Yen corrected lower in overnight trade as financial markets digested yesterday’s aggressive gains amid a sharp flare-up of market-wide risk aversion. The New Zealand Dollar outperformed, capitalizing on the most forgiving monetary policy outlook in the G10 FX space (according to priced-in expectations tracked by Credit Suisse) to add as much as 0.9 percent on average against its leading counterparts.

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Asia Session:

Euro Session:

Critical Levels:

--- Written by Ilya Spivak, Currency Strategist for Dailyfx.com

To contact Ilya, e-mail ispivak@dailyfx.com. Follow Ilya on Twitter at @IlyaSpivak

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