The euro slipped slightly in European trading on Tuesday against a basket of global currencies, giving up its two-week high against the US dollar amid modest corrective moves and profit-taking.

With uncertainty persisting over the likelihood of a European Central Bank rate cut in December, investors are awaiting Europes key November inflation readings later today to gain clearer evidence on the ECBs monetary-easing outlook.

Price overview

EUR/USD today: The euro dipped by less than 0.1% to $1.1603 from an opening level of $1.1609, after touching an intraday high of $1.1614.

The euro ended Monday slightly higher against the dollar, having reached a two-week high at $1.1653 as expectations for a US rate cut in December continued to increase.

European interest rates

Sources told Reuters that the European Central Bank is inclined to keep interest rates unchanged at its December meeting.

Money-market pricing for a 25-basis-point ECB rate cut in December remains steady around 25%.

European inflation

To reassess these odds, investors are awaiting Europes key November inflation data, which will show how much pressure policymakers at the ECB still face.

At 10:00 GMT, the eurozone consumer price index is due, with market expectations pointing to a 2.1% annual increase in November, matching the previous reading. Core CPI is expected to rise 2.4%, also unchanged from the prior figure.

Outlook for the euro

At Economies.com, we expect that if inflation data comes in cooler than markets currently anticipate, the probability of a December ECB rate cut will rise implying renewed downward pressure on the euro in the foreign-exchange market.