Attention is focused on the publication of the Consumer Price Index (CPI) for September in the United States. Credit Suisse economists expect EUR/USD tests 0.95 level if inflation numbers are strong.
EUR/USD could test parity if data is inconclusive
“We can see that core inflation is in line with what our economists expect, bringing this pricing closer to another 75 basis point hike, leaving open the possibility of further dollar strength. On the other hand, a “soft” core inflation figure, such as 0.2%m/m or lower, could lead to further de-risking and a dollar sell-off.as the market could respond to this situation with a change in favor of a 50 basis point rate hike in November.”
“In terms of EUR/USDwe see that strong US inflation data opens the door for a move to test 0.9500 on the way to our expectation of a fourth quarter range low of 0.9200, while soft data risks another move to test parity and our strategic ‘sell zone’ in the 1.0000-1.0200 range.“
Source: Fx Street
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