Important events today:

14:30 UTC – US: Crude oil inventories.

The ZEW index of economic sentiment in Germany has fallen to its lowest level since the fall of 2008. Pessimism in business circles of the eurozone’s largest economy is quite logical and was expected against the background of the powerful energy crisis that has engulfed all countries of the European Union. Most companies from different sectors of economy say in one voice that the current electricity prices are unaffordable for them, and next year the price tag will be even higher, as the record prices from the wholesale electricity market reach the population and businesses with a time lag. This is the first reason for selling the euro.

The second reason lies in expectations of a rise in interest rates by the U.S. Federal Reserve. Yesterday’s inflation data for August in the States failed to give a surprise to the market – although the figure fell to 8.3% (y/y), but investors were expecting a bigger drop. Prices are rising across a wide range of goods and services, and no investor believes this is a temporary increase. While last week the market was expecting the Fed to raise the rate to 4% at the December meeting, this outcome is now expected at the November 2 meeting.

Recommendations: Sell 1.0010/1.0040 with TP of 0.9950.