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EUR/USD holds near 1.1520 as traders price out September rate hikes

CME FedWatch data shows traders cut the odds of a September Fed hike to 40% after July CPI and core CPI came in line with expectations.

Reported · Written up by our desk · Major Pairs

EUR/USD was steady around 1.1520 in early European trade on Thursday, with the pair holding below its 100-day simple moving average and keeping a bearish near term tone, according to FXStreet. The article notes that the euro has been consolidating through much of August in a tight, flat range without a clear catalyst after the late July FOMC meeting.

The backdrop for the currency move is a cooling US inflation reading. FXStreet cites US CPI data showing prices rose 3.4% year over year in July versus 3.5% previously, while core CPI excluding food and energy increased 2.5% year over year versus 2.6% prior, both matching expectations.

FXStreet also points to trader expectations shifting in the wake of the data, saying the chance of a September Fed rate hike was trimmed to 40% based on the CME FedWatch tool. It adds that Fed officials will have August CPI and jobs reports before the September meeting.

Finally, FXStreet links potential near term risks for EUR/USD to geopolitics, saying escalating Middle East tensions could support demand for safe haven assets like the US dollar. The piece also flags that upcoming US Producer Price Index data for July is due later on Thursday, while technical levels in the article place resistance near 1.1565 and support around 1.1500.

Latest closeEUR/USD 1.153 ▼0.2%

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