EUR/USD: Euro Slips Away from $1.08 as US Inflation Comes In at 3.1% for January

Consumer prices kept heading lower in the past month, but failed to meet analysts’ consensus view of 2.9%.

• The EURUSD pair fell early on Tuesday, slipping away from $1.08 as forex traders reacted to the latest inflation report out of the US. After several days of sideways trading, the exchange rate tumbled about 0.7% to $1.0720 following January’s consumer-price data which indicated the US economy didn’t cool as expected.
• Inflation for January came in at 3.1%, above the anticipated 2.9% rate but below December’s 3.4%. Despite the markets sending good vibes, thoughts, and prayers all in an effort to receive more evidence that inflation is consistently moving lower and on track to hit the goldilocks area of 2%, home prices and rent prices pushed the headline figure up.
• The Federal Reserve received yet another curveball as policymakers need to decide when to start unwinding interest rates. The CPI number is a mainstay indicator tracked by the central bank as it is closely tied to the level of interest rates. A higher print would suggest rates should stay higher for longer. A lower reading, in contrast, would convince Fed officials to keep on with the anticipated rate-cut campaign.