Investors price in Federal Reserve tightening as US inflation expectations rise, pressuring the Euro near 13-month lows.
The Euro fell for a fourth straight session against the US Dollar, trading at 1.1345 as markets brace for US Personal Consumption Expenditures (PCE) inflation data. The pair hovers near a 13-month low of 1.1330, with Fed rate hike expectations driving demand for the USD.
Consensus forecasts show headline PCE inflation accelerating to 4.1% in May, a three-year high, up from 3.8% in April. Core PCE is expected to rise to 3.4% from 3.3%. Weak German consumer confidence data added pressure, with the GfK survey missing expectations and signaling deteriorating economic sentiment.
Technical indicators suggest a bearish trend, with the EUR/USD consolidating losses after a 2.3% drop in just over a week. The 4-hour Relative Strength Index remains oversold, while the MACD hovers near zero, limiting upside potential.