Somewhat bearish remarks from ECB president Strong odds of October eurozone interest rate cut Euro fell in European trade on Tuesday and extended the losses for the third straight session against the US dollar, plumbing one-week lows, under pressure from earlier data that showed slower than expected German inflation, and after bearish remarks from ECB President Christine Lagarde.

The data and remarks boosted the odds of an October 0.25% interest rate cut by the ECB.

The Price

The EUR/USD pair fell 0.3% today to $1.1100, the lowest since September 23, with a session-high at $1.1144.

The pair closed Monday down 0.2%, marking the second loss in a row on profit-taking off 14-month highs.

Euro rose 4% against the dollar in the third quarter, the first quarterly profit in three on hopes for a reduction in the US-eurozone interest rate gap.

German Inflation

Earlier German data showed consumer prices rose 1.6% y/y in September, slowing down from 1.9% in August, and the slowest reading since February 2021.

Lagarde

European Central Bank President Christine Lagarde told the European Parliament yesterday that recent developments extend confidence that inflation is returning to targets, which will reflect in the October policy decision.

European Rates

The odds of an ECB 0.25% interest rate cut in October jumped from 80% to 90% following the latest data.

Now investors await inflation data for the whole eurozone, expected up 1.8% in September, slowing down from 2.2% in August.