• EUR/USD trades with mild losses near 1.0935 in Friday’s early European session. 
• A warmer US inflation reading supports Fed hawks' call for gradual interest rate cuts.
• The ECB is expected to deliver a cut to the 3.5% deposit rate next week.

The EUR/USD pair remains on the defensive around 1.0935 during the early European session on Friday. The hotter-than-expected US inflation reading on Thursday has provided some support to the Greenback and caps the upside for the pair. 

The warmer US Consumer Price Index (CPI) reading coupled with the stronger-than-expected September jobs report strengthens the chance that any future rate cuts by the US Federal Reserve (Fed) should be gradual. The CME FedWatch Tool showed investors boost the odds that the Fed will trim its policy rate by 25 basis points (bps) in November to 83.3% following the CPI release.

Market players will take more cues from the US Producer Price Index (PPI) for September, along with the preliminary reading of the Michigan Consumer Sentiment Index for October, which is due on Friday. The headline PPI is expected to show an increase of 1.6% YoY in September, while the core PPI is estimated to see a rise of 2.7% YoY in the same reported period. Nonetheless, if the report shows a softer outcome, this could undermine the US Dollar (USD) against the shared currency.