German and Spanish inflation is expected to have edged closer toward the ECB target during August, but is not seen taking down the euro during Wednesday’s session.

German preliminary inflation for the month of August is due out at an unscheduled time, normally some time after all six federal states have reported their own individual numbers, and is forecast by economists to show a further pickup in price pressures in Europe’s largest economy.

“Today’s economic data for the euro area are not likely to break the EUR/USD uptrend...The strength in the currency could force the ECB to downgrade its inflation forecasts, making a tapered extension more challenging,” says Michala Marcussen, chief economist at Societe Generale.

The consensus among economists is for German consumer prices to have risen at a rate of 1.7% during August, up from 1.5% in the previous month. Spanish inflation is also seen edging higher, rising from 1.7% in July, to 1.8% for the month of August.

The euro to US dollar exchange rate edged down by 0.18% to 1.1950 during early trading in London Wednesday after its advance was stemmed by stronger than expected consumer confidence numbers from the US Tuesday, but it has gained more than 13% for the year to date.

The euro to pound exchange rate continued to trade sideways, showing a minor loss of 0.09%, with bids and offers accepted around the 0.9259 pence level. It has gained more than 8% for the year to date and currently sits close to its highest level since the financial crisis of 2008.

Danske Bank analyst Sverre Holbek has forecast that the annual rate of inflation should remain above 1.5% in both countries, which is close to the ECB’s target of 2%.

“However, the French and Italian figures are closer to 1.0%, and the underlying price pressure remains weak across the euro area, meaning the ECB is likely to stay patient, particularly in light of the stronger euro,” Holbek wrote in his morning note to clients.

While policy makers from ECB officials to German Chancellor Angela Merkel have expressed ambivalence at the euro’s current strength in recent days, a stronger currency can have the effect of reducing inflation while also acting as a headwind to export demand.

When the currency effect on inflation is taken together with weaker underlying price pressures in Southern Europe, the European Central Bank’s already delicate task of judging the optimum time to begin winding back its stimulus program becomes even more complicated.

“Our judgement is that the Bank is more concerned about the pace of change in the currency than its level. So if the euro continues to rise... President Draghi seems pretty likely to use the press conference following next week’s policy meeting (7th Sep.) to talk it down,” says Jennifer McKeown, a chief European economist at Capital Economics in London.