• EUR/USD steadies below 1.1200 with investors focusing on the inflation data from both the Eurozone and the US.
• The ECB is expected to deliver two more interest rate cuts by year-end.
• Fed’s Mary Daly vows for a 25-basis-points interest-rate reduction in September.

EUR/USD trades in a tight range below the immediate resistance of 1.1200 in Tuesday’s European session. The major currency pair consolidates as investors look for fresh cues about how much the European Central Bank (ECB) and the US Federal Reserve (Fed) will cut interest rates this year.

Market participants currently see an ECB September interest rate cut as certain. The central bank is also expected to cut its key borrowing rates again somewhere during the last quarter of this year. This growing speculation of two additional interest rate cuts responds to easing price pressures in the Eurozone and the uncertainty over its economic outlook.

For the latest update on the current status of Eurozone inflation, investors await the flash Harmonized Index of Consumer Prices (HICP) data for August, which will be published on Friday. On year, the headline and core HICP – which excludes volatile components like food, energy, alcohol, and tobacco – are estimated to have slowed to 2.2% and 2.8%, respectively. The scenario of soft inflationary pressures could weigh on the Euro as it would strengthen market speculation for further rate cuts. On the contrary, surprisingly hot inflation figures would weaken them, providing support to the Euro.