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EUR/USD slips below 1.1700 amid soft Eurozone CPI – BBH

EUR/USD is trading below 1.1700 as Eurozone December CPI data reinforces the ECB’s bias to keep rates on hold. With headline inflation at 2.0% y/y and core measures easing, the euro is expected to remain above 1.1500 in the coming months, while swaps price in steady policy, BBH FX analysts report.

🔗 Source

💡 DMK Insight

EUR/USD’s dip below 1.1700 signals a cautious outlook for the euro as inflation cools. With December CPI showing headline inflation at 2.0% y/y and core measures easing, the European Central Bank (ECB) is likely to maintain its current rate stance. This suggests that traders should brace for a range-bound market, with 1.1500 acting as a crucial support level. If the euro holds above this threshold, it could indicate resilience, but a break below might trigger further selling pressure. Keep an eye on the swaps market, which currently prices in steady policy; any shifts here could lead to volatility. On the flip side, if inflation data surprises to the upside in coming months, it could force the ECB’s hand, leading to a potential rate hike. For now, monitor the 1.1700 resistance level closely—if it fails to reclaim that, the bearish sentiment could deepen.

📮 Takeaway

Watch for EUR/USD’s ability to hold above 1.1500; a break below could signal deeper declines, while reclaiming 1.1700 may suggest a bullish reversal.

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