This week was dominated by US inflation data, with higher-than-expected inflation providing fresh support for the US dollar amid growing expectations that the Federal Reserve could raise interest rates before the end of the year.
Another important development was that, at least for now, Donald Trump refrained from launching a new military conflict with Iran and appeared to shift more attention towards domestic economic challenges.
Economic data from the Eurozone, meanwhile, remain broadly disappointing, offering little support for the single currency.
These developments strengthened the US dollar, in line with our expectations. Another one of our forecasts also proved accurate: EUR/USD moved towards the 1.10 level, with only a limited chance of a decisive break below it.
For now, we expect EUR/USD to consolidate slightly above 1.10. By the end of the trading day, we anticipate movements in both directions, although significant volatility is unlikely, despite the upcoming release of the US Producer Price Index (PPI).
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