In the view of economists at Commerzbank, the US inflation rate, due for publication today, will not cause the Fed to change its course. Therefore, the EUR/USD pair is set to remain within its current range of 1.00-1.04.
The Fed is likely to hike its key rate to 4% by year-end.“Even though today’s data might cause speculation on the market that inflation might have peaked I do not believe that this will be sufficient to change rate expectations massively.”
“The Fed is likely to hike its key rate to 4% by year-end according to our experts. The market is a little more cautious regarding the peak. As consensus too is expecting a slightly weaker CPI result for today (8.7%) this is unlikely to change and as a result, EUR/USD is likely to remain in its range.”
EUR/USD is holding steady above 1.0200, extending consolidation in early Europe. Germany confirms final HICP at 8.5% YoY in July. The US dollar struggles to find demand amid sluggish Treasury yields ahead of the all-important inflation data.
GBP/USD turns sideways below 1.2100 ahead of US Inflation
GBP/USD is juggling in a tight range below 1.2100, as investors refrain from placing bets on the pair ahead of the US Inflation data. The annualized US CPI is seen softening in July to 8.7%, although core figures are likely to quicken.
Gold: Bear cross to challenge bulls ahead of US inflation
Gold price tested the $1,800 mark for the first time in over a month on Tuesday, having shrugged off resurgent demand for the US dollar even as the Treasury yields jumped across the curve. XAU/USD eyes a softer US CPI print for a big break above the $1,800 mark.