Investors await US inflation data and monitor Middle East risks, capping aggressive bets on the currency pair.
The EUR/USD pair remains steady around 1.1545-1.1550 in early Asian trading, reflecting investor caution ahead of key US inflation figures and escalating Middle East tensions. The pair stays close to its highest level since June 17, supported by reduced Fed rate hike expectations after a weak US jobs report last week.
Traders are still pricing in a potential Fed rate increase by year-end due to inflation risks tied to rising oil prices. Iran’s refusal to negotiate with the US until January 20, 2029, and ongoing disruptions in key shipping straits have kept crude prices elevated, fueling inflation concerns.
Market participants remain on the sidelines, awaiting clearer signals from US CPI data before making significant moves. The USD struggles to extend gains despite geopolitical uncertainties, leaving the EUR/USD pair in a tight range.