EUR/USD turns sideways after facing barricades around 1.0200, US Inflation eyed
- EUR/USD is displaying back and forth moves in a 1.0188-1.0194 range as investors await US CPI.
- Fed policymakers need a series of declines in inflation rates rather than a one-time slowdown.
- The German HICP is expected to remain unchanged at 8.5%.
The EUR/USD pair is juggling in a narrow range of 1.0188-1.0194 in the Asian session. The asset has declined marginally after attempting a break above the psychological hurdle of 1.0200. On a broader note, the asset is advancing modestly after printing a low of 1.0146 last week.
Investors are preferring to remain on the sidelines as the release of the US Consumer Price Index (CPI) on Wednesday will unfold a decisive move for the major. Due to declining oil prices amid a temporary fix in supply worries and recession fears, the market participants have trimmed the US inflation forecasts.
The annual US CPI is seen lower at 8.7% than the prior release of 9.1%. Soaring oil prices after the Russia-Ukraine war was a major reason behind a steep rise in price pressures. Now, softer oil prices in July are bound to display a temporary slowdown in the inflation rate. A one-time decline in the price rise index is not going to delight the Federal Reserve (Fed) as a series of drops is necessary to conclude policy tightening measures.
On the Eurozone front, the entire focus will remain on German inflation data. Being, a core member of the European Union, the German Harmonized Index of Consumer Prices (HICP) holds significant importance. As per the market consensus, the economic data is likely to remain unchanged at 8.5%. However, this doesn’t trim the odds of a rate hike by the European Central Bank (ECB) in the September monetary policy meeting.