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EUR/USD firms near 1.1535 as softer US inflation cools the dollar

Wholesale costs were flat in July, helping push US rate hike odds lower, according to CME FedWatch.

Reported · Written up by our desk · Major Pairs

The euro strengthened against the US dollar, with EUR/USD gaining ground to around 1.1535 in early trading, after a softer-than-expected US inflation-related report reduced pressure on the Greenback, according to FXStreet.

Wholesale costs for goods and services in the United States were flat in July, following a revised 0.1% decline in June, and cooling more than expectations of a 0.2% drop, the outlet said. It also noted that core Producer Price Index inflation rose 0.2% month over month, below the 0.3% consensus.

FXStreet added that markets have shifted their expectations, pricing a 34.8% probability of a US rate hike at the September meeting, down from 40% immediately after the PPI data, per the CME FedWatch Tool. The outlet said July annual headline PPI rose 4.7% while core PPI increased 4.2% year over year.

Looking ahead, FXStreet said focus turns to US July Retail Sales later on Friday, while the European Central Bank is expected to raise rates by 25 basis points at its September meeting. It also highlighted Lagarde comments that renewed Middle East hostilities and higher oil prices could raise upside risks for Eurozone inflation.

Latest closeEUR/USD 1.153 ▼0.1%

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