Inflation rate of +2.9% expected in August 2026

Core CPI held at 2.4%, but the headline pickup from 2.8% in July is precisely the kind of print that revives the hawkish conversation at the ECB, and we think currency desks have cause to recalibrate euro crosses into the close of the quarter.

Energy Reasserts Itself

The August German breakdown tells us the bloc-level fight against energy-driven price pressures is not yet finished. Destatis flagged a further acceleration in energy costs from +8.3% in July and +3.4% in June, which suggests the favorable base effects from last year's oil weakness have rolled off and outright price gains are now doing the work. For ECB communicators, any framing of the disinflation process as "on track" faces a harder sell in the next round of commentary, and we would expect the long end of the Bund curve to attract a bid if the final 10 September release confirms the provisional 2.9%.

Diverging Mandates: CHF Stays Quiet, KRW Creeps Higher

Switzerland's August print reads like the inverse picture. The FSO reported a 0.4% monthly rise in the national CPI to 101.5 points, lifting annual inflation to just 0.8%, with the move driven by housing rents and petroleum-linked items. That gap — a German headline within reach of 3% against a Swiss annual rate still beneath 1% — is the cleanest expression of the yield-differential story we have seen this quarter, and it argues for further EUR/CHF upside if subsequent European data continue to surprise to the upside.

South Korea, meanwhile, saw its annual rate accelerate to 3.1% from 2.8% in July, with core CPI at 3.4% per Trading Economics — still above the Bank of Korea's 2.0% objective and shaped by petroleum costs as well as base effects from earlier mobile plan subsidies. For USD/KRW, a central bank that cannot credibly pivot dovish keeps the pair elevated, and we would monitor the 1,400 level as the marker that confirms directional intent.

Levels to Watch Through 10 September

The final German CPI lands on 10 September, and with the HICP methodology change introduced in January 2026, cross-country comparability deserves a second look before positions are sized. The markers we are tracking: the monthly energy contribution in the detailed release, the trajectory of services inflation across the eurozone periphery, and how EUR/CHF spot digests any fresh policy commentary. For the won, the next BoK communication will determine whether 3.4% core is read as a one-off or as a regime shift, and that single binary call may matter more for Asia FX than the German print itself.

For a wider frame on how competing structural pressures reshape growth and currency trajectories, the long-read on China's economic transition and its structural trade-offs sits naturally alongside this week's European inflation surprises.