The major currency pair remains in a consolidation phase on Thursday. The current EURUSD exchange rate stands at 1.0745.
Yesterday, the US released the long-awaited CPI figures for August. Inflation increased by 0.6% on a monthly basis, in line with expectations. This marks the highest monthly increase since June 2022. Annual inflation reached 3.7 per cent, surpassing the previous month.
The core CPI rose by 0.3% m/m. Factors such as rising fuel prices may have contributed to the overall price increase. Higher than-expected CPI values have added uncertainty to the capital markets. The US Federal Reserve is likely to take a pause in its series of interest rate hikes in September, with a probability of such an outcome estimated at 97%. However, in November, the Fed may raise the rate one last time in this cycle, and keep it elevated until mid-2024.
The European Central Bank will hold its meeting today. The primary focus in the major currency pair is on the ECB's decision and accompanying commentary. While the regulator is unlikely to raise the rate immediately, this action will become necessary in the future as the inflationary spiral continues to tighten.