The EUR/USD exchange rate failed to capitalize on Wednesday’s widespread improvement in risk sentiment. The US administration has once again deferred planned tariff implementations. Key US inflation data and consumer sentiment indicators are scheduled for release later this week. Despite a broad market recovery driven by the US administration’s delayed tariff implementation, EUR/USD remains constrained between 1.0900 and 1.1000. President Trump announced a 90-day postponement of “reciprocal” tariffs via social media, although a 10% across-the-board levy remains under consideration. While global investors reacted positively, the Euro’s brief rally towards 1.1100 quickly dissipated, leaving the pair within its established trading range. Interest rate markets have adjusted downwards their expectations for Federal Reserve (Fed) rate cuts, with swap traders now pricing in 75 basis points of reductions for the remainder of the year. Although markets anticipate a 25-basis-point cut in June, JPMorgan analysts suggest the Fed is more likely to maintain a cautious stance due to ongoing tariff uncertainties, potentially until September. The Consumer Price Index (CPI) will be released on Thursday, followed by the Producer Price Index (PPI) and the University of Michigan (UoM) Consumer Sentiment Index on Friday. These releases represent the final significant US inflation and sentiment figures from the pre-tariff period of 2025, providing crucial benchmarks for future economic assessments.
