The post EUR/USD surges to 1.0900 as soft US Inflation fuels Fed rate-cut bets appeared on BitcoinEthereumNews.com.

EUR/USD rose to a fresh one-month high near 1.0900 as soft US inflation data weighs heavily on the US Dollar. Annual headline and core inflation decelerated more than expected to 3% and 3.3%, respectively. The Euro capitalizes on easing fears of a widening French financial crisis and diminishing ECB rate cut prospects. EUR/USD jumps higher to near 1.0900 in Thursday’s New York session. The major currency pair strengthens after the United States (US) Consumer Price Index (CPI) report for June turned out to be softer than expected. This has boosted market speculation for the Federal Reserve (Fed) to start reducing interest rates from the September meeting. The CME FedWatch tool shows that the probability of the Fed cutting rates from September has increased to 89% from 74.4% recorded a week ago. US annual core inflation, which strips off volatile food and energy prices, decelerated to 3.3% from the estimates and May’s reading of 3.4%. In the same period, the headline inflation grew at a slower pace of 3% against expectations of 3.1% and the prior release of 3.4%. Monthly headline CPI surprisingly deflated by 0.1% after remaining unchanged, while investors forecasted a nominal increase of 0.l%. The core inflation rose by 0.1%, slower than estimates and the former reading of 0.2%. A consecutive decline in the US inflation would also increase the confidence of investors that the disinflation process has resumed and that the high price pressures recorded in the first quarter were merely a short-term blip. A higher-than-expected decline in US inflation data weighs heavily on the US Dollar and Treasury yields. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, tumbles to near 104.50. 10-year US Treasury yields plummet below 4.20%. Daily digest market movers: EUR/USD strengthens on diminishing ECB’s back-to-back rate cut prospects EUR/USD moves higher to 1.0850 as concerns over the widening French financial crisis ease as Marine Le Pen’s far-right National Rally failed to maintain…

---

Filed under: News - @ July 11, 2024 10:10 pm