Investors await July US PCE inflation figures and Fed Chair remarks, with core pressures expected to keep inflation above target.
The EUR/USD pair remains range-bound at approximately 1.1660 in Asian trading, as markets await key US economic data. The July Personal Consumption Expenditure Price Index, due at 12:30 GMT, is expected to show a 0.1% monthly gain in the PCE deflator, lowering the annual rate to 3.6%. Core PCE inflation is projected to rise 0.2% month-over-month, keeping the yearly rate at 3.3%, signaling persistent inflationary pressures.
Analysts anticipate gradual disinflation but note inflation remains above the Federal Reserve’s 2% target. Wells Fargo expects no major surprises, citing recent CPI and PPI reports. Meanwhile, the European Central Bank is widely expected to raise interest rates in September, with Deutsche Bank analysts forecasting one final hike despite recent energy-driven inflation upticks.
Focus will shift to Fed Chair remarks at the Jackson Hole Symposium later this week, which could provide further clarity on monetary policy direction. The Eurozone’s economic resilience continues to support expectations for tighter ECB policy.