EUR/USD weakens on ECB rate cut speculation
The EUR/USD pair is trading with a mild negative bias near 1.0550 on Monday during the Asian trading hours. Investors will be closely watching the US Consumer Price Index (CPI) inflation report for November, due on Wednesday. On Thursday, the European Central Bank (ECB) interest rate decision will be in the spotlight. Investors will be looking for clues on what will happen next.
Expectations for a quarter-point rate cut by the Federal Reserve (Fed) on December 18 increased last week after the employment report showed strong job creation, but not at a pace that would deter Fed officials from lowering rates to between 4.25 and 4.5% from the current range of 4.5 to 4.75%.
With expectations high for a US rate cut later this month, Wednesday’s inflation data could be the only potential hurdle left for a third straight rate cut from the Fed. Annual consumer price inflation is expected to edge up to 2.7% year-on-year in November from 2.6% in October. Core inflation, which excludes volatile food and energy prices, is projected to be steady at 3.3% year-on-year in November.
Source: FXStreet
