Ella 
During the Asian session on Tuesday, the euro rose to around 1.0940 against the dollar. The pair edged higher as the U.S. dollar consolidated. The U.S. Producer Price Index (PPI) due later on Tuesday will be in focus. The overall PPI quarterly growth rate in July is expected to slow to 0.1% from the previous value of 0.2%, while the core PPI annual growth rate in July will fall to 2.7% from the previous value of 3.0%.
Markets are pricing in a 100% chance that the Fed will cut interest rates by 25 basis points in September, and it is very likely that the Fed will cut interest rates by a full percentage point before the end of the year. Analysts at Morgan Stanley said on Monday they forecast the Federal Reserve will cut interest rates by 25 basis points (bps) in September, maintaining that stance despite the current downturn in global markets. Rising bets on a rate cut by the Federal Reserve could weigh on the U.S. dollar (USD) and be temporarily positive for EUR/USD.
Across the pond, Germany’s expected ZEW for August is expected to be 31.8, compared with 41.8 in July, while the current assessment for August is expected to be -75.0, compared to -68.9 previously. Weaker-than-expected data would turn the economic outlook negative and likely keep the European Central Bank (ECB) accommodative, with a rate cut on September 12 fully priced in.
