Set your Euro Forex Trades Early This Weekend

A slate of world financial numbers are due out over the weekend, including the highly anticipated German Producer Prices (year over year). That data, which comes out late Sunday night/early Monday morning (2 a.m. EST or 6 a.m. GMT) is correlated with the rate of inflation in Europe, and could define EUR forex trades for the beginning of Monday morning's U.S. currency market. German Producer Prices measures the change in the prices paid by domestic producers. Producer prices, which are also known as “factory gate prices”, are those charged by producers before retail/consumer markets. Increases in German Producer Prices act as an early indicator of inflation, as higher producer prices are often passed on to consumers in the form of higher prices. To keep the index focused on actual inflation, and not short-term volatility in seasonal items, the index excludes energy and food prices. Expectations are for a 6.3% increase, which would represent a smaller increase than last month. If the data come in higher, this could point to higher inflation across Europe. This could harm the euro, especially if Greece is still burning and investors are still concerned that the contagion may spread to other nations. If the data are below that, inflation fears could be eased across the continent, and with it, the globe. In that scenario, the euro could have a good day, particularly against the dollar. Forex traders may want to investigate and align their trades accordingly.