On Monday, the single currency was trading against the US dollar near the support level of 1.1800.
The quotes temporarily fell to the level of 1.1770, but returned to the opening level of the session. The dollar has confidently started a new trading week. Data on consumer inflation in the United States, which will be published today, may increase fears that the Fed will begin to abandon its ultra-soft monetary policy even against the background of the spread of the coronavirus. Yesterday, these concerns were supported by the president of the Philadelphia Federal Reserve, Patrick Harker. He supports the early curtailment of incentives. According to Harker's baseline forecast, inflation will be around 4% by the end of the year, and then begin to decline to 2% in 2022 and 2023. However, the president of the Philadelphia Federal Reserve sees an increased risk that inflation may exceed these figures. Data on consumer prices in the United States will become the next important object of attention of traders in the foreign exchange market, along with indicators of retail sales and production. These data determine the progress of the economy on the eve of the Fed meeting on September 21-22. Core consumer price inflation is expected to slow slightly to 4.2%. While the US currency is growing against most of its competitors from the G-10 countries before the release of inflation.
The forecast assumes a decline in the euro/dollar exchange rate to the levels of 1.1780, 1.1760 and 1.1730.