Anna 
In European trading, EUR/USD observed a marginal 0.1% decline, hovering at 1.0852, as investors awaited the release of German consumer inflation data. This release is expected to provide insights into the strength of the overall eurozone Consumer Price Index (CPI), scheduled for later in the week.
Amid preparations by the European Central Bank (ECB) for a potential interest rate cut next week, uncertainties linger regarding future monetary policy actions. Despite this, the euro is poised to mark a 1.7% gain against the dollar for the month, representing its first monthly increase in 2024.
“The highlight of the eurozone calendar this week will be Friday’s release of flash eurozone CPI for May. Input into that release will be today’s German CPI data, where consensus is looking for a slight uptick to 2.4% YoY from 2.2%,” commented analysts at ING.
While an increase in German CPI may not deter the ECB from implementing a rate cut next week, it could potentially lead the market to reassess expectations for further rate cuts throughout the year.
In parallel, GBP/USD experienced a modest uptick to 1.2762, with the election campaign in full swing.
“Labour’s Shadow Chancellor, Rachel Reeves, is making all the right fiscal noises – although the Labour Party may find they’ve boxed themselves from a policy perspective should they win July’s general election,” noted analysts at ING.
