Today’s inflation data triggered market movements in the direction we had anticipated. The US CPI (October) came in at 0.4%, above the expected 0.3%. Core CPI (excluding Food & Energy) also reached 0.3%, compared with market expectations of 0.2%.
These figures provided further support for the US dollar, allowing it to continue strengthening against the euro.
There is a growing possibility that the Federal Reserve could raise interest rates before the end of the year, a prospect that would provide additional support for the dollar.
Meanwhile, uncertainty remains surrounding the latest negotiations between the United States and Iran, as well as between the United States and Russia. It is still unclear whether these diplomatic efforts will lead to an end to the ongoing conflicts.
Over the next few days, if there are no clear and positive outcomes from either set of negotiations, the US dollar is likely to maintain its upward momentum.
Under these circumstances, EUR/USD could approach the 1.10 level. However, we do not currently expect a significant move below 1.10, at least in the near term.
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