In the view of economists at Commerzbank, the US inflation rate, due for publication today, will not cause the Fed to change its course. Therefore, the EUR/USD pair is set to remain within its current range of 1.00-1.04.

The Fed is likely to hike its key rate to 4% by year-end

“Even though today’s data might cause speculation on the market that inflation might have peaked I do not believe that this will be sufficient to change rate expectations massively.”

“The Fed is likely to hike its key rate to 4% by year-end according to our experts. The market is a little more cautious regarding the peak. As consensus too is expecting a slightly weaker CPI result for today (8.7%) this is unlikely to change and as a result, EUR/USD is likely to remain in its range.”

See – US CPI Preview: Forecasts from nine major banks, soaring inflation to ease off in July