The currency pair stabilizes near 1.1455 as traders await German HICP data, which may influence ECB rate hike bets.
EUR/USD trades slightly lower at 1.1455 in early European trading after a two-day recovery. The pair remains above its 20-period EMA at 1.1422, signaling improved near-term sentiment.
Investors are focused on July’s German flash HICP, expected to rise 2.8% YoY, up from 2.4% in June. Monthly HICP is projected at 0.8%, reversing a 0.2% decline. Stronger inflation could bolster ECB rate hike expectations. German and Eurozone Q2 GDP data will also be released.
The Fed’s decision to hold rates at 3.50%-3.75% for the fifth consecutive meeting supported the pair’s recent gains. Fed officials reiterated concerns over inflation risks, maintaining a cautious stance.