EURO REGAINS THE SMILE AND LOOKS TO RETAKE 1.1000

Euro reclaims part of the ground lost vs. the US Dollar.

Stocks in Europe open the session with a decent bounce.

EUR/USD approaches 1.1000 on improved risk appetite.

The USD Index (DXY) returns to the low 102.00s.

Chinese inflation figures surprised to the upside in July.

Following two consecutive sessions of losses, the Euro (EUR) has managed to regain its composure and overcome some of the recent pessimism against the US Dollar (USD). This has resulted in EUR/USD showing resilience and attempting to surpass the psychological barrier of 1.1000 on Wednesday.

The improved overall sentiment in terms of risk appetite has put pressure on the Greenback, giving the pair an extra boost in the middle of the week. This is happening at a time when there is still uncertainty regarding the direction of both US and German yields, as market participants eagerly await the release of important US inflation data measured by the Consumer Price Index (CPI) on Thursday.

In the broader context of monetary policy, there have been no notable changes. Investors still anticipate that the Federal Reserve will maintain its current interest rates for the rest of the year, while the European Central Bank (ECB) is facing internal divisions within its Council regarding the continuation of its tightening measures after the summer.

In terms of economic data, there will be limited releases on both sides of the Atlantic during this session. The only notable data point expected later in the North American session is the weekly Mortgage Applications tracked by the Mortgage Bankers Association (MBA