The Euro (EUR) nurses marginal gains against the US Dollar (USD) on Wednesday, with the EUR/USD pair flattening just below the 1.1550 level during the European trading session.
FX volatility remains at unusually low levels as investors await the release of US Consumer Price Index (CPI) data to place directional bets on the USD
Growing concerns about the fate of the US-Iran peace process are weighing on the Euro on Wednesday, as reports of attacks on vessels attempting to cross the Straits of Hormuz and Bab el-Mandeb on Tuesday have cast further doubt about the resumption of free sea traffic in the Gulf region. In the Eurozone, the German Harmonised Index of Consumer Prices (HICP) confirmed preliminary figures pointing to an acceleration to a 2.8% year-over-year rate in July, from 2.4% in June, as energy inflation jumped to 7.3%, from 2.7% in the previous month. The positive impact on the Euro, however, has been short-lived.
US Dollar rallies, on the other hand, remain subdued, with investors awaiting the release of July’s CPI figures for a better assessment of the Federal Reserve’s (Fed) interest rate plans. The Market consensus anticipates a moderate slowdown in July’s consumer prices, with the yearly CPI growth easing to a 3.4% rate from 3.5% in June, with core inflation slowing down to a 2.5% year-on-year reading from the 2.6% rate posted in the previous month. Technical Analysis: EUR/USD wavers in range lacking a clear bias EUR/USD trades at 1.1535, holding in a neutral range between nearby structural levels.