EUR/USD: Hot US CPI outcome could delay a test of 1.11 – SocGen

EUR/USD holds above 1.10. But a push to the 1.11 mark might be delayed on strong US inflation data this week, economists at Société Générale report.

Tactical outlook has become more symmetric

“The paltry 0.2% gain so far in May pegs the single currency at the bottom end of G10 ranking. Rate differentials have proved more static for the Euro compared to the Dollar bloc which explains the flat performance of the currency.”

“The tactical outlook has become more symmetric after the oneway traffic since mid March.”

“If we get a hot US CPI outcome this week, then doubts of a Fed pause in June will inevitably intensify and could delay a test of 1.11.”