The key macro event of the week – US Consumer Price Index – is behind us. And the weak Dollar trend is set to persist, according to economists at MUFG Bank.

EUR/USD reverting back significantly to entertain the idea of testing parity again

“The Dollar remains on a w eaker footing because the CPI data was not enough to change the forw ard rates markets. The data wasn’t as big a surprise as the October and November CPI reports but did still contain elements that are encouraging for those believing inflation will fall further.”

“The hawkish Fed view that would encourage renewed USD strength seems further away now and with it the prospects of EUR/USD reverting back significantly to entertain the idea of testing parity again.”