EUR/USD flat lines near 1.0300 on softer US CPI data

• EUR/USD trades flat around 1.0295 in Thursday’s early Asian session. 

• The softer US core CPI data revives Fed easing expectations, which cap the upside for the USD. 

• Traders see the ECB delivering three or four rate cuts this year. 

The EUR/USD pair holds steady around 1.0295 during the early Asian session on Thursday. The cooler-than-expected US Consumer Price Index (CPI) inflation data for December raises the bet that the US Federal Reserve (Fed) could cut interest rates twice this year, which weighs on the Greenback. However, rising concerns over Eurozone economic growth might cap the upside for the major pair. 


The US Dollar (USD) declined after the US core CPI data came in softer than estimated, triggering expectations that the Fed's easing cycle may not be over yet. Markets now expect the US central bank to deliver 40 basis points (bps) of rate cuts by year-end, compared with about 31 bps before the inflation data.

Across the pond, the European Central Bank (ECB) delivered rate cuts four times last year, and traders expect three or four moves this year due to the concerns about the Eurozone's weak economic outlook. The rising bets of further interest rate reductions from the ECB could undermine the Euro (EUR) against the USD in the near term. 


Later on Thursday, investors will keep an eye on Germany’s Harmonized Index of Consumer Prices (HICP) for December and the ECB Monetary Policy Meeting Accounts. On the US docket, the Retail Sales for December and weekly Initial Jobless Claims will be the highlights.