EUR/USD Stuck in Range as Investors Await Key US Events

The EUR/USD pair has been trading in a tight range around 1.1660 as investors await key US events, including the Personal Consumption Expenditure Price Index (PCE) data for July and remarks from Federal Reserve Chair Kevin Warsh at the Jackson Hole Symposium.

According to Wells Fargo, the PCE deflator is expected to rise 0.1% in July, nudging the year-over-year rate down to 3.6%, while core PCE inflation is expected to rise 0.2% on the month, leaving the annual rate at 3.3%. This suggests a picture of gradual disinflation but inflation still running above the Fed's target.

The European Central Bank (ECB) is also set to raise interest rates in September, with analysts at Deutsche Bank expecting a final 25bps hike to a 2.50% terminal rate. The ECB has been tightening monetary policy in response to high inflation, driven by energy prices, but the bank's hawkish stance suggests that interest rates will remain elevated for some time.