Euro Falls Below 1.1650 as Strong US Inflation Data Boosts USD
The Euro (EUR) continued its decline for the second consecutive day on Thursday, falling below 1.1650 against the US Dollar (USD). The EUR/USD pair touched weekly lows as the USD gained strength from the release of strong US inflation data on Wednesday.
The Personal Consumption Expenditures (PCE) Price Index, a key indicator of inflation, showed a higher-than-expected reading, which may embolden Federal Reserve hawks to push for interest rate hikes in the coming months. However, bets on a September hike remain unchanged at 36%, according to the CME Group's FedWatch Tool.
In contrast, the Eurozone economy received some positive news with the German GfK Consumer Sentiment Index showing an unexpected improvement. This follows recent upward revisions of German Q2 Gross Domestic Product (GDP) figures and a positive surprise on the IFO business climate earlier in the week.