US Inflation Data to Set Stage for Fed Interest-Rate Decisions

Today's trading session will be dominated by key consumer inflation (CPI) releases from around the world. The main focus for global investors will be this afternoon's US CPI reading for July, which will have a direct impact on expectations for the Federal Reserve's interest-rate path at upcoming meetings.

The data from the US release is expected to show a 3.4% year-over-year (YoY) increase in inflation, down slightly from last month's 3.5%. Core CPI, which excludes volatile food and energy prices, is also expected to rise by 2.5% YoY.

Earlier in the day, markets will assess Germany's final inflation figures for July, which are expected to show a 2.8% increase in both the Consumer Price Index (CPI) and Harmonized Index of Consumer Prices (HICP). These numbers will provide a clearer picture of price pressures in the eurozone's largest economy.

The US CPI release is widely expected to be a key volatility catalyst for the EUR/USD currency pair, with any surprises likely to affect expectations for the Fed's interest-rate path and investor risk appetite.