EURUSD is trading around the lower end of its weekly range.
EURUSD struggles to generate traction early Wednesday, remaining in a narrow band barely over 1.0800 after registering minor losses on Tuesday.
Eurostat will release the Harmonized Index of Consumer Prices (HICP) data. The European Central Bank’s preferred inflation indicator, during the European session. Markets estimate the core HICP to rise 2.8% annually in July. Following a 2.9% increase in June. Nevertheless, the data is unlikely to cause a market reaction unless it significantly deviates from market consensus.
The economic calendar will also include statistics on EU inflation and US ADP employment changes.
The ADP Employment Change data will be released in the second half of the day on the US economic docket. EURUSD Investors expect private-sector employment to rise by 150,000 in July, reflecting the increase seen in June.
The Fed is widely expected to maintain its current policy settings following the July meeting.
However, prior to the Federal Reserve (Fed) policy pronouncements. Market participants may be hesitant to take big bets based on this data.
Following the policy meeting on July 30-31, the Fed is widely likely to maintain its current monetary policy.
The CME FedWatch Tool indicates that an interest rate drop in September is fully priced. Furthermore, markets estimate a stronger-than-60% chance. That the Fed will decrease the policy rate by a total 75 basis points (bps) by the end of 2024. If Fed Chairman Jerome Powell defies market expectations. Citing robust growth data and continuing tight labor market conditions the initial reaction could support the USD while weighing on the EURUSD.
On the other hand, the market positioning suggests. That there isn’t much room left for the USD to fall, unless Powell adopts a highly dovish tone and hints at multiple rate cuts in the last quarter of the year.
