Softer-than-expected US inflation figures reduce Fed rate hike pressure, lifting the euro against the dollar.
The EUR/USD pair rose to 1.1425 in early Asian trading on Wednesday, extending gains above 1.1400. The move follows softer US inflation data, which eased expectations of further Federal Reserve tightening.
Prior to the release, the pair traded near 1.1380, with markets pricing in a more aggressive Fed stance. Comparable inflation prints earlier this year had kept the dollar supported, but Wednesday’s data shifted sentiment.
The dollar index dipped slightly, reflecting reduced demand for the greenback as traders reassessed rate hike probabilities.