Euro holds above 1.1500 as US inflation curbs Fed bets
The Euro holds firm above 1.1500 as inflation data in the US curbed Fed rate hike bets, as traders shifted from expecting a rate hike to a hold in the September 16 meeting, while investors await the release of economic growth figures in the European Union (EU).
The Euro remains above 1.1500 amidst US inflation data dampening expectations of a Federal Reserve rate increase at the September 16 meeting. Traders have shifted from anticipating a hike to a hold, awaiting European Union growth figures. US producer-side inflation, as measured by the Producer Price Index, has slowed to 4.7% and 4.2% for headline and core figures, respectively, compared to June.
This has led investors to lower expectations of Fed easing in September, with a 67% chance of a rate hike by year-end, down from 70% previously. Jobless claims rose to 209K, slightly above forecasts but close to the 4-week average of 199K. Geopolitical tensions persist, with Iran maintaining control of the Strait of Hormuz. In Spain, inflation reached 3.9%, driven by energy price increases.
The Euro area's economic data will include GDP figures, expected to grow 0.4% quarter-over-quarter and 1% year-over-year. US Retail Sales are scheduled for July. EUR/USD is trading near 1.1529, maintaining a slightly bullish outlook as the price holds above key support levels. Momentum indicators suggest steady buying interest, with the 14-period Relative Strength Index at 57. Support is found near 1.1529, with resistance at 1.1849.
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