EUR/USD is coming under negative pressure below the 1.0800 level early on Friday. The currency pair is finding it hard to stay on the positive side of the equation after a very slight bounce off the bottom on Wednesday. Traders and investors alike are proceeding with great caution. US Personal Consumption Expenditures (PCE) inflation data is very closely watched. They can’t wait for key PCE releases, hoping they’ll provide the freshest clues about the unfolding economic picture.
The EUR/USD’s failure to build on Thursday’s rallying has initiated a consolidation phase. With expectations continuing to revolve around key economic indicators—and all eyes on the macroeconomic and central bank landscape—EUR/USD is likely to remain trapped in this range. Today’s double-digit drop in crude futures is indicative of jittery market sentiment, as traders look ahead to see what the latest inflation figures might bring.
With EUR/USD trading under 1.0800, the market’s attention has shifted back to the upcoming US PCE inflation data. Analysts say this is the data that will matter most as the Federal Reserve weighs what to do with monetary policy. Any surprise outturn in inflation numbers could lead to sharp movements in currency markets, thereby affecting investment decisively.