UK inflation, German confidence data in focus

Traders will closely weighing the consumer-price numbers from the UK in less than an hour, especially as the headline gauge slumped below the Bank of England`s target of less than 2% much faster than already anticipated. Experts believe the inflation rate will be remain near or below the bank`s goal when official numbers for August are published at 08:30 GMT. The market consensus forecast for inflation data came as follows:

- UK   CPI (YoY) (Aug)  1.5%   vs. 1.6%

- UK  RPI (YoY) (Aug)  2.4%   2.5%

- UK PPI Output (NSA) (YoY) (Aug)  -0.2%   vs. -0.1%

The sterling fell for the second day against the US dollar before the inflation numbers on Tuesday. As of 03:52 am ET, the  GBP/USD   traded around 1.6178 compared with the day`s open at 1.6230.

In the euro area, traders will be watching economic sentiment figures for August from Germany and 18-nation, with a consensus forecast calling for the following estimates:

-  German ZEW Economic Sentiment (Sep)  5.2   vs. 8.6

- Eurozone   ZEW Economic Sentiment (AUG)   21.3   vs. 23.7

Analysts expect further decline in business confidence in the whole region apparently, despite the ease in the Ukraine crisis. The growth rate has simply remained flat in the second quarter, prompting the European Central Bank to cut interest rate for the second time in four months.

The euro steadied against the dollar ahead of the confidence release. The  EUR/USD  was rangebound around 1.2944 compared with the day`s open at 1.2936.