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Euro steadies versus dollar after July eurozone inflation beat

EUR/USD traded near 1.1600 as eurozone annual HICP rose to 2.9% and traders pared odds of a Fed rate hike to 32.8% for September.

Reported · Written up by our desk · Major Pairs

EUR/USD rose during European hours on Wednesday, holding around 1.1600 after minor losses the prior day, as the euro found support from July eurozone inflation data.

Eurozone annual HICP increased to 2.9% from 2.8% in June, matching preliminary estimates and staying above the ECB’s 2.0% target. Core inflation, excluding food and energy, also edged up to 2.5% from 2.4%, reinforcing a more hawkish ECB tone amid concerns about elevated energy costs and continued upside risks from food inflation.

The currency pair also gained as the US dollar weakened on fading expectations for a Fed rate hike next month, with US retail sales falling in July for the first time in nine months. According to the CME FedWatch tool, traders priced only a 32.8% chance of a September hike, down from 51.2% a month earlier, and attention turned to the release of the Fed’s July meeting minutes for fresh direction.

Latest closeEUR/USD 1.157 ▲0.4%

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