Home›Forex›Major Pairs›Euro firms as US dollar slips after cooling US inflati…

Euro firms as US dollar slips after cooling US inflation data

July US headline CPI rose 3.4% year over year, while core CPI climbed 2.5%, shifting rate-hike pricing for September to about a 40.1% chance.

Reported · Written up by our desk · Major Pairs

EUR/USD paused its three-day slide and traded near 1.1530 during Asian hours on Thursday, as the US dollar faced pressure after the release of July US CPI data, according to FXStreet.

Inflation moderated across a range of goods and services, with headline CPI increasing 3.4% year over year in July, down from 3.5% previously. Core CPI, excluding volatile food and energy, rose 2.5% year over year, down from 2.6% in June, and both readings matched market expectations.

The softer inflation readings cooled expectations for a more aggressive Fed move in September. Based on the CME FedWatch tool, interest-rate swaps are now pricing roughly a 40.1% chance of a September hike, while October odds fell to about 60% from 75% the prior day.

FXStreet also pointed to potential limits on euro upside risk from geopolitical tensions involving the US and Iran, alongside a Eurozone backdrop that continues to support the ECB’s hawkish stance, including euro area inflation at 2.9% in July and market-based one-year inflation expectations near 2.4%.

Latest closeEUR/USD 1.153 ▼0.2%

More like this

Sources