EURUSD

The exchange rate will determine its direction entirely based on the CPI data from the US, which will be released on Thursday this week. Although the CPI data from Germany, to be announced on Wednesday, may create some volatility for the Euro in the first half of the week, this effect will be limited. The real big movement will come with the US inflation figures. An inflation rate that comes in above expectations could strengthen the Dollar, creating significant selling pressure on the exchange rate due to the perception that the Fed will have to maintain its tight stance. Conversely, data that comes in below expectations could weaken the Dollar, triggering an upward movement in the exchange rate on the expectation that the Fed will have room for interest rate cuts.