EURUSD currency pair is consolidating near 1.0700 following strong US inflation fugures.

The EURUSD pair remained in a downward trend, touching new three month lows on Wednesday following the announcement of strong US inflation data. Higher-than-expected inflation has moved market sentiment toward no interest rate adjustment by the Federal Reserve (Fed) at its upcoming March meeting. This has offered upward support for the US Dollar (USD) against the Euro (EUR).
The Euro had a moment of reprieve after the publishing of On Tuesday, the Eurozone and Germany both reported highe than expected economic sentiment figures. Investors are now eagerly expecting preliminary Gross Domestic Product (GDP) statistics, which will be released on Wednesday. Furthermore, market investors are anticipating a speech by Christine Lagarde, President of the European Central Bank (ECB), on Thursday.
Despite lower than expected US Treasury yields, the US Dollar Index (DXY) recovers from intraday losses and continues to rise. Market sentiment has shifted dramatically, with expectations for an unchanged interest rate next month reaching almost 90%, a huge increase from just a month ago. Investors are now considering a rate drop by the Federal Reserve (Fed) in June.

Daily Market movers: EURUSD declines despite a better US dollar.

The US Dollar Index increases to 104.90, with 2-year and 10-year US Treasury rates of 4.60% and 4.29%, respectively, as of press time.
According to the FedWatch Tool, traders are pricing in a 37% chance of a 25 basis point (bps) rate drop by the Federal Reserve in May and 51% in June.
The US headline Consumer Price Index (CPI) increased by 3.1% in January, exceeding the projected 2.9% but falling short of the prior rate of 3.4%.
US inflation jumped by 0.3% month on month, despite expectations that it would remain at 0.2%.
US Core CPI (YoY) stayed constant at 3.9%. Despite market expectations of a fall to 3.7% in January.
Core Inflation (MoM) climbed by 0.4% instead of 0.3% as projected. To remain unchanged in January.
ECB Vice President Luis de Guindos underlined that. While progress is being made, wage pressures remain high. And there is insufficient data to demonstrate a drop.
ZEW’s Eurozone and German Economic Sentiment statistics were higher than projected. At 25 vs. 20.1 and 19.9 vs. 17.5, respectively.
The German Current Situation ZEW sentiment index. However, fell short of forecasts, coming in at -81.7 vs -79.