Whether or not the year-on-year inflation rate falls a little more than expected may not be all that interesting for the FX market today, as volatile energy and food prices play an important role. What is more interesting is that the month-on-month rate is likely to remain a little too high to be in line with the inflation target – not to mention the stubbornly high core inflation of over 4%! – and therefore rapid rate cuts are unlikely to be discussed by the ECB in the near future.

If the numerous ECB speakers today continue to emphasise a ‘high for longer’, the EUR/USD could rise a few more pips again before the focus shifts to Wednesday's Fed meeting.