EUR/USD climbs after hot inflation data

The EUR/USD dived to a daily low of 0.9631 as a reaction to US inflation, but the pair was able to recover later. CPI jumped more than estimated by 6.6% YoY, topping August 6.3%. Contrarily, headline inflation edged lower from the previous month’s 8.3% to 8.2%, almost 1% lower than June’s 2022 peak.

The EUR/USD pair is recovering from earlier losses as inflation in the United States rose above estimates. CPI data is testing the patience of Fed’s policymakers.

Core CPI in the US jumped to a four-decade high, exceeding forecasts, cementing the case for further Fed tightening at November’s meeting. Hence, the EUR/USD is trading at 0.9775, after sliding to 0.9631 daily low, as traders reacted to US data.

On the EU’s side, the Bundesbank and Belgium’s central bank chiefs, Joachim Nagel and Piere Wunsch, prompted the ECB for more interest rate hikes due to high inflation levels in the Eurozone. During the European session, German inflation figures rose as expected but persisted at high levels, as shown by HICP at 10.9%, while German CPI remained at 10%.