EUR/USD Stuck Near Mid-1.1500s as Traders Await US CPI Data

The EUR/USD pair has been trading flat near the mid-1.1500s against the US dollar as traders await the release of the US Consumer Price Index (CPI) data this week. The recent disappointing US Nonfarm Payrolls report has led investors to scale back their expectations for an immediate interest rate hike by the Federal Reserve, which is weighing on the strength of the US dollar.

The ongoing Iran crisis and its impact on oil prices have also contributed to inflation fears, with Cleveland Fed President Beth Hammack stating that the current interest rate is not meaningfully restricting the economy. Hammack emphasized the need for some number of rate hikes to meet the 2% inflation goal, highlighting the significance of upcoming CPI data in shaping the Federal Reserve's policy path.

The US CPI and Producer Price Index (PPI) data releases on Wednesday and Thursday, respectively, are expected to provide crucial cues about the Fed's future policy decisions. TD Securities notes that recent inflation dynamics will likely keep the Fed focused on August inflation data ahead of its September meeting, underscoring the central bank's data-dependent stance.