Ahead of CPI figures, EUR/USD dips as traders left uncertain post-FOMC minutes

A number of European Central Bank (ECB) officials’ neutral stance caused the Euro to suffer only minor losses against the US Dollar, although data from the US raised worries that the US Federal Reserve (Fed) might raise rates in response to an inflation report. Trading at 1.0598, the EUR/USD is down 0.13%.

The US Fed just released its most recent minutes from the September monetary policy meeting, in which participants acknowledged that reaching the Fed’s aim has grown more difficult. Participants saw upside risks to inflation but downside risks to economic activity. Policymakers at the Fed observed that as the economy approaches its peak, communications and decisions should change to a time horizon that involves maintaining rates higher for longer.

Following the release of the minutes, the EUR/USD exchange rate barely changed, staying below the 1.0600 mark. Prior to this, the US Department of Labour (DoL) reported that producer-side inflation figures had exceeded estimates.

With the exception of the Producer Price Index (PPI) monthly reading, which expanded below the prior month’s number, most figures had surpassed August data, suggesting that inflation has resumed. This is thought to be due to high energy prices and the autoworkers’ strike.

Aside from this, the most recent Fed officials have adopted a neutral stance, with the exception of Fed Governor Michelle Bowman, who emphasised the need for additional tightening. The ECB’s Kazaks stated that interest rates are necessary to keep inflation at 2% in the second half of 2025, but they left the door open to further increases.

In terms of data, the Eurozone economic docket witnessed inflation in Germany continued to ease as expected.