Ella 
EUR/USD recovered recent losses and stabilized above 1.0750.
Economists expect the European Central Bank to keep interest rates unchanged on Thursday.
The U.S. CPI rose 0.6% on a monthly basis in August, compared with 0.2% in the previous month, the highest monthly increase in 14 months.
Investors await the ECB interest rate decision, a speech from ECB President Christine Lagarde and U.S. economic data.
EUR/USD is gaining momentum and trading around 1.0750 in early European trade on Thursday. Traders ignored upbeat U.S. inflation data and awaited Thursday’s European Central Bank rate decision. The market expects the European Central Bank to keep interest rates unchanged at its September meeting.
Most economists in a Reuters poll conducted between September 5 and 7 expected the ECB to keep interest rates unchanged on Thursday, but as sentiment is changing, money markets are currently pricing in a 65% chance of a rate hike. Investors will take cues from ECB President Christine Lagarde’s speech. Hawkish comments from ECB policymakers could boost EUR/USD and boost EUR/USD.
In terms of the U.S. dollar, data released on Wednesday showed that the overall CPI hit its highest level in 14 months in August, with a monthly increase of 0.6%, compared with the previous value of 0.2%. CPI increased at an annual rate of 3.7%, compared with the previous value of 3.2%, which was higher than expected. Core CPI (which excludes volatile commodity and energy prices) rose 0.3% month-on-month from 0.2% in the previous month. The core CPI annual rate was recorded at 4.3%, compared with the previous value of 4.7%.
The market believes that the Federal Reserve will maintain interest rates steady at next week’s meeting. However, these data mean the Fed should be wary of another rise in inflation in the coming months. According to the CME Fedwatch tool, investors put a 97% chance of keeping interest rates unchanged at 5.25%-5.50% in September. However, the likelihood of a rate hike at the November meeting rose to 49.2%.
Market participants will pay close attention to the European Central Bank’s interest rate decision at 20:15 Beijing time and the press conference of European Central Bank President Christine Lagarde at 20:45 Beijing time. In addition, U.S. weekly jobless claims, producer price index (PPI) and monthly retail sales will also be released on Thursday. These key events can trigger market-wide volatility. Traders will be looking for EUR/USD trading opportunities.
