EUR/USD Pressured as Germany's Inflation Cools More Than Expected

EUR/USD is trading at 1.10817, reflecting a cautious market as new data reveals that Germany's CPI (Year-over-Year) for August increased by just 1.9%, below the expected 2.1% and significantly lower than the previous month's 2.3%. This softer-than-expected inflation data adds to the growing narrative that the European Central Bank (ECB) may lean towards cutting interest rates sooner than anticipated.

The cooling inflation in Germany, the Eurozone's largest economy, suggests that price pressures across Europe might be easing faster than expected. This is likely to fuel expectations of a more dovish ECB, adding downward pressure on the euro.