• EUR/USD faces selling pressure as the US Dollar holds onto gains ahead of the US CPI data for September.
• Fed officials are highly concerned about reviving job growth.
• The Euro is under pressure as the ECB is expected to reduce interest rates further by 50 bps by the year-end.

EUR/USD exhibits a weak performance in Thursday’s European session after diving below the key support of 1.0950 on Wednesday. The major currency pair remains under pressure as the US Dollar (USD) clings to gains ahead of the United States (US) Consumer Price Index (CPI) data for September, which will be published at 12:30 GMT.

The US Dollar Index (DXY), which tracks the Greenbacks value against six major currencies, trades close to a fresh seven-week high near 103.00.

Economists expect the annual core CPI – which excludes volatile food and energy prices – to have grown steadily by 3.2%. Annual headline CPI is expected to have decelerated to 2.3% from 2.5% in August. The month-on-month headline and core CPI are expected to have grown at a slower pace of 0.1% and 0.2%, respectively.

The impact of the inflation data on market expectations for the Federal Reserve (Fed) interest rate outlook is expected to be moderate as recent commentaries from Fed officials have indicated that they are confident about price pressures remaining on track to return sustainably to the bank’s target of 2%. Fed policymakers are highly focused on reviving labor demand due to which they unanimously voted for a larger-than-usual rate cut size of 50 basis points (bps) in the September policy meeting.