EUR/USD balances below 1.0540 ahead of US Inflation and ECB’s Lagarde

• EUR/USD is sustaining below 1.0540 amid anxiety over the US Inflation release.
• Fed’s Mester believes that the Fed won’t stop interest rate hikes till it finds a compelling plunge in inflation.
• ECB’s Lagarde may dictate over concluding the APP and growth rate amid the Ukraine crisis.

The EUR/USD pair is displaying back and forth moves in a narrow range of 1.0526-1.0538 in the Asian session. The greenback bulls are frozen now as investors are preferring to remain on the sidelines amid anxiety over the release of the US inflation.

The mega event of the US Consumer Price Index (CPI) will release today and investors are seeing yearly inflation on the lower side. A preliminary estimate of 8.1% against the prior print of 8.5% is very much lucrative for the Federal Reserve (Fed). However, the deviation between the targeted inflation of 2% and inflation forecasts is extremely wider. This will continue to haunt the US economy as elevated price pressures will continuously reduce the real income of the households. The core CPI that excludes food and energy prices is seen at 6%, lower than the former release of 6.5%.

Meanwhile, the US dollar index (DXY) has tumbled to near 103.83 after a long consolidation in the early Tokyo session. The comments from Cleveland Fed President Loretta Mester have bolstered the fact that the Fed won’t get softer on interest rates sooner. Fed policymaker believes that the central bank won’t stop until it finds a ‘compelling’ slippage in inflation numbers.

On the euro front, the speech from European Central Bank (ECB) President Christine Lagarde will remain in focus. ECB Lagarde may dictate the roadmap for concluding the Asset Purchase Program (APP) in the third quarter of this year. Apart from that, the speech will put some light on the employment numbers and growth rate of the eurozone.