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EUR/USD stays near 1.162 as dollar lacks fresh momentum

The dollar index hovers around 98.82, while markets look ahead to US PPI on Thursday and CPI on Friday for clues on the Fed.

Reported · Written up by our desk · Major Pairs

EUR/USD was virtually flat near 1.1623 during Tuesday’s US trading session, with the euro recovering from an intraday low as the US dollar struggled to extend earlier gains, FXStreet reported.

The US Dollar Index, which tracks the greenback against a basket of six major currencies, traded around 98.82 after briefly reclaiming 99 and lingering near its lowest level in more than two weeks. FXStreet said the dollar’s inability to gain traction persists despite hawkish Federal Reserve expectations, and that escalating Middle East tensions did not noticeably boost defensive demand as oil prices stay elevated.

Attention is shifting to upcoming US inflation data, with PPI due Thursday and CPI due Friday as the next major test for the Fed ahead of its policy decision. FXStreet cited the CME FedWatch Tool showing about a 60% chance the Fed will raise rates by 25 basis points at the September 15 to 16 meeting.

On the euro side, traders are focused on the European Central Bank’s rate decision on Thursday, where a 25 basis point deposit-rate hike to 2.50% is fully priced in. FXStreet also noted eurozone inflation rose to 3.3% in August from 2.9% in July, and said the euro’s reaction could hinge on President Christine Lagarde’s comments and the ECB’s updated economic projections.

Latest closeEUR/USD 1.159 ▼0.1%|Dollar index 99.58 ▼0.1%

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