With key U.S. data still missing and the Fed in blackout, the US Dollar (USD) lacks drivers. Eurozone inflation should pose no challenge to ECB expectations, keeping markets range-bound and tilting the US Dollar (USD) slightly lower this week, Commerzbank's FX analyst Antje Praefcke notes.

ECB outlook steady as Eurozone CPI surprise unlikely

"As data from the US is gradually being released again, it is certainly worth taking a look at these figures. But even the Fed will only receive the really important ones, especially the labor market report, after its meeting next week (December 9+10). Due to the blackout period, we will not hear anything substantial from the Fed until next week anyway. So no impetus for the dollar is to be expected from this corner."

"The market does not expect any change in key interest rates in the euro area until April next year. Furthermore, the results for the major countries are already known, which reduces the potential for surprises in the data to almost zero. And even if the inflation rate in the euro area rises marginally in November, as our experts expect, this is likely to be primarily due to base effects. Inflation rates are likely to fall significantly again in the coming months. So there is no cause for concern for the ECB and no reason for the market to adjust its interest rate expectations."

"All in all, there are sufficient reasons to expect that we could continue to see sideways trading with a possible slight downward trend in the dollar in what is likely to be a week with little momentum."