Market Report | Exness

Ahead of the German CPI Release, Will the Euro/Pound Find Support Around 0.8560?

31.08.2026 New

Today's Highlights

China's August Manufacturing Purchasing Managers' Index
Preliminary August Consumer Price Index for Germany

On the 28th, the U.S. dollar rose following a speech by Federal Reserve Chair Warsh. Chair Warsh indicated that unless the Fed becomes confident that inflation is heading toward 2%, the Fed will need to take additional action.The probability of a 25-basis-point rate hike at the September meeting rose from about 35% to 57.5%.The Dollar Index rose 0.59% to around 99.69, while the dollar-yen pair traded within a range of about 0.95 yen, from 159.26 to 160.21 yen, before closing near 160.07 yen.The level around 160.20 yen is likely to act as resistance, while the level around 159.30 yen is likely to act as support. The focus will be on whether the pair can hold the key psychological level of 160.00 yen.

Among European currencies, the euro fell against the pound amid a downward revision to France’s GDP and confirmation of accelerating CPI. France’s final GDP figure for the April–June quarter came in at 0.0% quarter-on-quarter, revised down from the preliminary estimate of 0.2%.Meanwhile, the preliminary August CPI reading came in at 2.4% year-over-year, marking an acceleration from the previous reading of 2.1%. The euro-pound pair traded within a range of approximately 24 pips, between 0.8555 and 0.8579 pounds, and closed near 0.8559 pounds.The 0.8580-pound level is likely to be seen as resistance, while the 0.8550-pound level is likely to be seen as support. We will need to assess whether the pair finds support in the 0.8550-pound range.

In today’s economic data, China’s August Manufacturing Purchasing Managers’ Index (PMI), released at 10:30, came in at 49.8—up from the previous reading of 49.2, but still below the 50-point threshold that marks the boundary between expansion and contraction.Japan’s July new housing starts, released at 2:00 p.m., rose 8.2% year-over-year, marking a slowdown from the previous month’s 18.6% growth. Later today, Turkey’s Q2 GDP will be released at 4:00 p.m., followed by Germany’s preliminary August CPI at 9:00 p.m.Germany’s CPI is expected to come in at 0.3% month-over-month and 3.0% year-over-year, compared to 0.8% and 2.8%, respectively, in the previous reading. We will be watching closely to see how improving business sentiment in China and inflation trends in Germany affect the direction of European currencies and the U.S. dollar.

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