EUR/USD Falls Below 1.1400 Ahead of Key US Factory Orders, Job Data

EUR/USD Slips Below 1.1400 as Eurozone Inflation Disappoints

Euro Weakens as ECB Rate Cut Becomes a Done Deal

The EUR/USD pair is trading below the 1.1400 level as the market digests a softer-than-expected Eurozone CPI report for May. After touching a high of 1.1450 earlier this week, the euro has reversed sharply on renewed expectations of further monetary easing by the European Central Bank (ECB).

Headline inflation remained unchanged in May, and the year-over-year CPI dipped below 2% for the first time in eight months, falling to 1.9% from April’s 2.2%. The Core CPI also disappointed, slipping to 2.3% YoY from 2.7%, missing the forecast of a milder drop to 2.5%.

With inflation decelerating, the ECB is widely expected to cut interest rates for the eighth consecutive time on Thursday. President Christine Lagarde is expected to maintain a data-dependent stance, but markets are already pricing in further easing later this year.

Dollar Index Still Weak – US Data in Focus

Despite this euro weakness, the US Dollar Index (DXY) remains near six-week lows around 98.60. Investors are watching for key US economic data, especially:

• Factory Orders for April, expected to post a sharp decline after a strong March reading.
• JOLTS Job Openings, which could provide clarity on the state of the US labor market ahead of Friday’s Nonfarm Payrolls.

Monday’s weaker US Manufacturing PMI has already raised doubts about economic momentum, and a soft set of Factory Orders could further hamper USD recovery.

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