Ella 
EUR/USD fell in early Asian trading on Monday. Economic data will be heavy this week, with traders looking for clues from German growth data, euro zone gross domestic product (GDP) and inflation data ahead of the much-anticipated Federal Reserve meeting on Wednesday. EUR/USD is currently trading around 1.0557, down 0.07% on the day.
The market expects that European economic conditions will continue to deteriorate. Germany’s gross domestic product (GDP) is expected to contract at a quarterly rate of 0.3%, after growing by 0.2% in the previous quarter. Eurozone GDP is expected to fall to 0.2% from 0.5% in the previous month. Finally, the Eurozone’s Harmonized Consumer Price Index is expected to fall to 3.4% in October from 4.3%.
In the U.S. dollar, the Federal Reserve (FED) is expected to keep interest rates unchanged at the end of its two-day meeting on Wednesday. At the end of last month, Federal Reserve Chairman Powell said that inflation was still too high, which raised market expectations for continued interest rate hikes before the end of the year. That said, talk of the Fed keeping interest rates higher for an extended period of time could boost the dollar and be bearish for the EUR/USD pair.
In terms of data, the U.S. core personal consumption expenditures index (PCE) in September was at an annual rate of 3.7%, compared with the previous value of 3.8%. The monthly rate climbed to 0.3% from the previous value of 0.1%. Additionally, the PCE price index came in at an annualized rate of 3.4% in September, versus expectations for 3.4%.
Market participants will be keeping a close eye on Germany’s third-quarter gross domestic product (GDP). Elsewhere, preliminary Spanish consumer price index (CPI) values for October and German CPI will be released later on Monday. Later in the week, German retail sales, euro zone GDP and euro zone inflation data are due out on Tuesday. The focus this week will be Wednesday’s Federal Reserve monetary policy meeting. The event could spark volatility in financial markets and provide direction for EUR/USD.
