EUR/USD advances to 1.1530, highest since April 22 amid sustained USD selling
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EUR/USD attracts some follow-through buyers on Thursday amid a broadly weaker USD.
Softer US CPI lifts Fed rate cut bets and weighs on the buck amid the trade uncertainty.
The fundamental backdrop favors bullish traders as the focus shifts to the US PPI report.
The EUR/USD pair extends its weekly uptrend and climbs to the 1.1530 area or the highest level since April 22 during the Asian session on Thursday. Moreover, the fundamental backdrop favors bullish traders and suggests that the path of least resistance for spot prices is to the upside.
The US Dollar (USD) retests the monthly trough amid firming expectations that the Federal Reserve (Fed) will resume its rate-cutting cycle in September. The bets were reaffirmed by softer US consumer inflation figures released on Wednesday, which, along with persistent trade-related uncertainties, continue to weigh on the buck and act as a tailwind for the EUR/USD pair.
US President Donald Trump told reporters on Wednesday that he will set unilateral tariffs and send letters to trading partners in the next week or two, saying this is the deal you can take it or leave it. Trump's comments add a layer of uncertainty and overshadow the optimism over the US-China agreement on a plan to implement the Geneva Consensus and ease trade tensions.
The shared currency, on the other hand, draws support from the European Central Bank's (ECB) hawkish signal that the end of the rate-cutting cycle is nearing. This is seen as another factor that contributes to the bid tone surrounding the EUR/USD pair and validates the near-term positive outlook in the absence of any relevant market-moving economic releases from the Eurozone.
Meanwhile, the US economic docket features the Producer Price Index (PPI) and the usual Weekly Initial Jobless Claims. The data might influence the USD price dynamics and the EUR/USD pair. That said, any positive USD reaction to the data is likely to be short-lived. Moreover, the aforementioned supportive factors back the case for a further appreciating move for the pair.
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