EUR/USD: Moderate upside risks if US Core CPI comes at 0.4% – ING

Economists at ING discuss EUR/USD outlook.  They expect the pair to be driven by US data and Fed policy decision.

Don't look at the Eurozone, look at the US

US CPI numbers and the Fed decisions are what will matter the most for EUR/USD this week, and more generally, US data and the Fed’s future path are what will primarily determine the direction of EUR/USD moving ahead.

If we are right about a 0.4% core US CPI print today, there may be some moderate upside risks for EUR/USD, should investors see that as enough to price out the remaining 23% implied probability of a hike tomorrow. But we are not convinced of that and some cautious trading ahead of key central bank risk events may keep the pair capped.

See – US CPI Banks Preview: Headline inflation is moderating, but underlying persists