German CPI confirms softer price pressures as euro remains under pressure

• 1.1155 is the latest level for EUR/USD. The pair has slipped from Tuesday’s highs in the mid-1.1200s, staying within its recent trading ranges.
• October’s easing in price pressures was confirmed by Germany’s final HICP figures.
• Strong inflation readings and hawkish remarks from Fed speakers have supported the US Dollar’s advance.

EUR/USD trades at 1.1155. Wednesday marks a second consecutive day of losses for the Euro (EUR) against the US Dollar (USD), with Germany’s final inflation figures offering no support. The pair has pulled back from Tuesday’s session highs just above 1.1250 but is still inside its previous range, holding above year-to-date lows around 1.1110.

A 0.1% monthly decline and 2.8% year-on-year rise in October were confirmed by Germany’s final Harmonized Index of Consumer Prices (HICP), matching the preliminary estimates. September had recorded increases of 0.6% and 3.3%, respectively.

0.4% US CPI rise strengthens Fed tightening expectations

Stronger-than-forecast US Consumer Price Index (CPI) readings, alongside hawkish remarks from Federal Reserve (Fed) speakers, have all but confirmed a December rate increase. This combination is helping the US Dollar outperform most of its peers on Wednesday.

At 0.4%, October’s rise in US consumer prices exceeded the market forecast of 0.3%, data from the US Bureau of Labor Statistics (BLS) showed. Food and accommodation costs increased. Core inflation rose 0.3%, also above expectations, but year-on-year figures were not disclosed because of the 2025 Federal Government shutdown.
Philadelphia Fed President Anna Paulson urged “further gradual tightening” on Wednesday to return inflation to target. Dallas Fed President Lorie Logan followed a few hours later, saying that “it is clear that the Fed needs at least two more quarter-percentage-point  increases.”

A rate increase at the Fed’s 9 December monetary policy meeting is consequently almost fully priced in. Markets also assign a 12% probability to a 50-basis-point rise, supporting broad-based gains in the US Dollar.