As of August 13, 2024, the EUR/USD pair is holding steady above the 1.0900 mark, with traders closely monitoring the upcoming US Producer Price Index (PPI) report, scheduled for release at 12:30 GMT.
This key economic indicator is expected to provide insights into inflation trends and could influence the Federal Reserve’s future interest rate decisions.
Market participants have tempered their expectations for a 50 basis point rate cut by the Fed in September.
Meanwhile, the European Central Bank (ECB) is receiving support for further rate reductions to stimulate economic growth in the Eurozone.
ECB member Olli Rehn has recently voiced his support for additional rate cuts, emphasizing the need to bolster the region’s fragile economic recovery.
In Tuesday’s European session, the EUR/USD pair has shown slight weakness but remains above the critical 1.0900 level.
The currency pair is trading in a narrow range as investors await the US PPI data, which is anticipated to show modest increases in producer prices.
The data could have a limited impact on the US Dollar unless it deviates significantly from market expectations.
The broader market is also focused on the upcoming US Consumer Price Index (CPI) data for July, which will be released on Wednesday.
This data is expected to play a crucial role in shaping expectations for the Fed’s monetary policy, with the potential to influence the timing and magnitude of future rate cuts.
Additionally, the Euro is facing some selling pressure following the release of weaker-than-expected German and Eurozone economic sentiment data for August.
The ZEW Survey revealed a sharp decline in investor confidence, with ongoing concerns about uncertain monetary policy, weak business data from the US, and geopolitical risks in the Middle East.
Overall, the EUR/USD pair is likely to remain under pressure in the short term, as investors weigh the implications of upcoming US inflation data and the ECB’s potential monetary policy moves.
The Forex Factory platform continues to provide real-time updates and analysis for traders navigating these uncertain market conditions.
