EUR/USD trades near 1.1222 as lower oil prices weigh on the dollar, while investors await Wednesday's US CPI data, which is forecast to show an uptick in both headline and core inflation.
WTI has fallen to a two-month low of $84.65 as investor optimism grows over a deal to end the US-Iran conflict, which MUFG says would mean a less prolonged energy price shock. Continued progress toward a deal would keep crude under pressure, though a breakdown in talks is the obvious downside risk for shorts.
The dollar extends losses with DXY near 101.67 as WTI slides to a two-month low of $84.65, easing inflation concerns and weakening the case for prolonged Fed tightening, per MUFG. Wednesday's CPI forecasts (3.9% headline, 2.8% core, both above prior readings) are the main risk to this softer dollar tone.
The pair holds gains at 1.1222 as falling oil (WTI at a two-month low of $84.65) eases inflation fears and weighs on the dollar, with Eurozone energy importers also benefiting. However, October US CPI due Wednesday at 13:30 GMT is forecast at 3.9% YoY headline and 2.8% core, both above the prior readings, which could strengthen the dollar. Bullish and bearish forces roughly cancel ahead of the data.
The EUR/USD pair maintains stability at 1.1222 as falling WTI oil prices, currently near a two-month low of $84.65, pressure the US Dollar. Markets are focused on Wednesday's US CPI release, with headline inflation expected to rise to 3.9% YoY from 3.7%.
Optimism about a possible deal to end the US-Iran conflict suggests a shorter energy price shock, which is pulling oil prices down to around a two-month low near $84.65.
The October US CPI report on Wednesday at 13:30 GMT, with headline inflation forecast at 3.9% YoY, up from 3.7%.
A break below Monday's low of 1.1138 and the major support at 1.1104, for example if Wednesday's US CPI comes in hot and supports the dollar, would expose 1.1000.