The EUR/USD currency pair experienced a range test with an upside bias after bouncing off a one-and-a-half-week low near 1.1500, recovering slightly during the European session, according to FX Street.
Market participants are closely watching Federal Reserve policy and inflation trends for clues on future moves. Francesco Pesole from ING maintains a constructive view on EUR/USD, believing the Fed is unlikely to pursue further tightening measures. Meanwhile, Alvin Liew of UOB highlights that while headline and core Consumer Price Index (CPI) figures remain above the Fed’s 2% inflation target, inflation is expected to ease gradually, with headline CPI averaging 3.5% and core CPI 2.8% by 2026.
For Japanese investors, the EUR/USD movement reflects broader global shifts in monetary policy expectations and inflation trajectories, factors that can influence risk appetite and portfolio allocations in FX and equity markets.