In February, the Consumer Price Index (CPI) in Saxony, Germany, increased from -0.4% to 0.3%. This change indicates a rise in inflation rates within the region.

EUR/USD remains steady around 1.0400 as market participants await inflation data from Germany and the US. Meanwhile, GBP/USD trades near 1.2600, impacted by tariff uncertainties from the US.

The US core Personal Consumption Expenditures (PCE) Price Index for January is projected to rise by 0.3%. Gold prices decline towards a two-week low amid a stronger US dollar, as traders anticipate the upcoming PCE data.

Saxony’s inflation shift from -0.4% to 0.3% in February shows a turnaround in pricing pressure. An increase like this suggests that consumer prices are no longer falling and may be starting to climb. If this trend continues in other German states, broader inflation expectations could change. That, in turn, might prompt shifts in European Central Bank policy discussions.

At the same time, the euro holds steady around 1.0400 ahead of incoming inflation reports from both Germany and the US. A lack of movement often signals that traders are waiting for fresh data before making any large bets. On the other hand, sterling sits near 1.2600, with traders factoring in tariff concerns raised by the US. Such policies can influence the demand for goods and services, which affects the pound’s valuation relative to other currencies.

We are also looking at the US core PCE Price Index, which is predicted to climb by 0.3% for January. This figure is a preferred inflation measure for the Federal Reserve. When such data aligns with or surpasses forecasts, markets usually adjust expectations for future interest rate moves.

Meanwhile, gold prices have slipped towards a two-week low, weighed down by a stronger US dollar as traders prepare for the PCE release. A stronger dollar makes gold more expensive for international buyers, reducing demand. If the inflation data meets or exceeds market expectations, this could put further pressure on gold, at least in the short term.

For derivative traders, the focus remains on inflation numbers and the potential impact on central bank decisions. Fast reactions to any surprises will likely define market movements in the next few weeks.