- EUR/USD appreciates as market sentiment improves ahead of the upcoming United States–Russia meeting on Friday.
- Trump and Putin are set to meet to seek a resolution to the conflict in Ukraine.
- Traders are awaiting US inflation data that could influence the Federal Reserve’s interest rate outlook.
EUR/USD edges higher after registering losses in the previous two successive sessions, trading around 1.1620 during the Asian hours on Tuesday. The pair may further appreciate as the Euro (EUR) could receive support amid improving market sentiment ahead of the upcoming United States (US)-Russia meeting on Friday.
US President Donald Trump and Russian President Putin will meet in Alaska on August 15, with an aim to finding a resolution to the conflict in Ukraine. However, Ukrainian President Volodymyr Zelenskyy is reportedly not expected to participate.
The European Central Bank (ECB) concluded its latest easing cycle in July after delivering eight rate cuts over the past year, bringing borrowing costs to their lowest level since November 2022 to support slowing Eurozone growth. However, some market participants still anticipate the possibility of another ECB cut before the year ends.
Traders are expected to focus on the US consumer inflation data, due later in the North American session, as it could shape the Federal Reserve’s (Fed) interest rate outlook. The July Consumer Price Index (CPI) is forecast to rise 0.2%, slightly below June’s 0.3%, while the annual rate is projected to accelerate for the third consecutive month to 2.8%. Core CPI is also anticipated to pick up to 0.3%.
Markets are now pricing in approximately 84% odds of a Fed rate cut at the September meeting, down from 90% a week ago, according to the CME FedWatch tool.
