EUR/USD: Euro Eyes $1.10 After US Dollar Shows No Reaction to 3.2% Inflation for February

Currency pair rebounded from its session low on Tuesday after latest consumer price data signaled inflation pressures may stick around.

Key Points:

• Euro sets gaze on key $1.10 mark.
• Inflation grew 3.2% in February.
• Fed meets on March 19-20.
• The EURUSD pair showed little reaction to the hotter-than-expected inflation data on Tuesday. The euro kept marching higher, even rebounding from its session low of $1.0902, after the US published its consumer price index data for February. The CPI showed price pressures remained fairly elevated with a 3.2% increase from a year ago, topping analyst estimates for 3.1% growth.
• Despite the notion that loftier inflation should buoy the local currency, the US dollar retreated against the euro and pulled back broadly across the board. The EURUSD jumped about 30 pips to float at current market prices near $1.0930 with bulls chasing the milestone $1.10 threshold, last seen on January 11.
• The thorny inflation figure could potentially weigh on the Federal Reserve’s rate-cutting pace. Fed chief Jay Powell has previously said policymakers will slash borrowing costs after first boosting their conviction by more data. With that in mind, the March 19-20 meeting will be a heated event not so much for the interest rate decision—an expected hold—but for the guidance markets will get.