The EUR/USD pair is experiencing downward pressure, trading near 1.0300 during European hours on Wednesday. The dovish commentary from the European Central Bank (ECB) has been a significant factor suppressing the pair's value. Meanwhile, the market's attention is shifting towards the upcoming US Consumer Price Index (CPI) data, which is expected to provide further direction in the currency markets.
In the United Kingdom, the Pound Sterling (GBP) managed to recover from an unexpected cooling in inflation. The December UK CPI inflation rate fell to 2.5% year-on-year, falling short of the expected 2.7%. Despite this surprise, the GBP/USD pair managed to regain strength, climbing back to 1.2200 during the European session on Wednesday.
In other market movements, gold prices reversed an intraday drop to $2,669, turning positive for the second consecutive day. However, the upside seems restricted as investors await the US CPI report. The US Dollar remains broadly steady but is trading near its weekly low following softer US Producer Price Index (PPI) figures released on Tuesday. Risk sentiment appears tepid as traders anticipate the implications of the forthcoming US inflation data.
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