EUR/USD Eases from Highs Ahead of Eurozone CPI Data, Eyes ECB Rate Outlook

EUR/USD Eases from Highs Ahead of Eurozone CPI Data, Eyes ECB Rate Outlook

June 3, 2025 – Forex Market Brief

The EUR/USD pair is trading marginally lower around 1.1420 on Tuesday after rallying the day prior. The pullback reflects market caution ahead of the Eurozone Consumer Price Index (CPI) release — a critical piece of data that could guide the European Central Bank’s (ECB) next rate move.

Eurozone Inflation Takes Center Stage

Initial CPI figures for May are expected to show a cooling of inflation:

• Headline CPI: Forecasted to slow to 2.0% YoY, down from 2.2% in April.
• Core CPI: Expected to ease to 2.5% YoY, from 2.7% previously.

A moderation in inflation may reinforce expectations of an ECB rate cut this Thursday, the eighth consecutive easing move. However, ECB President Christine Lagarde is likely to maintain a neutral and data-dependent tone, aiming to preserve flexibility for future decisions.

Read more: How Inflation Data Impacts the ECB’s Policy Path

US Dollar Lacks Momentum

Despite a slight recovery in sentiment, the US Dollar remains stuck near multi-week lows. Recent US Manufacturing PMI data highlights the drag that Trump-era tariffs are having on industrial output.

Additionally, rising fiscal health concerns and uncoordinated trade policies continue to weigh on USD performance, making it difficult for the Greenback to regain sustained buying interest.

EUR/USD Technical Snapshot

• Support: 1.1390
• Resistance: 1.1450
• Short-Term Bias: Sideways to mildly bullish, pending CPI results
• Key Market Drivers: Eurozone inflation data, ECB forward guidance, US macro indicators

Related on Tredu.com:

• What Slowing Inflation Means for the Euro
• EUR/USD: Top Factors Influencing the Pair in 2025
• Lagarde’s Strategy: Inside the ECB's Inflation Response