The EUR/USD pair is posting marginal gains on Thursday, following a sharp sell-off over the last three days. The pair extended its decline on Wednesday following a hawkish message from the Federal Reserve (Fed), and remains on the defensive after Germany's preliminary Consumer Prices Index (CPI) confirmed the easing inflationary pressures, with all eyes on the US Personal Consumption Expenditures (PCE) Prices Index figures.

The Euro (EUR) is trading at 1.1450 at the European market opening, up from the seven-week lows at 1.1400 hit after the Fed's monetary policy decision on Wednesday, yet limited below 1.1460 and on track for a 3% depreciation in July.

The US is emerging as the best performer in an eventful week. US data continues to show that the economy remains resilient, and the Federal Reserve maintains its cautious stance towards interest rate cuts. At the same time, the deals with key US trading partners have eased some of the trade uncertainty, which hurt the US Dollar earlier in the year.

On Wednesday, preliminary data released by the US Commerce Department revealed that the economy grew beyond expectations in the second quarter, providing further reasons for the Fed to wait longer for a better assessment of the economic impact of tariffs.

The Fed confirmed the expectations and maintained its benchmark interest rate unchanged, shrugging off US President Donald Trump's calls for an easier policy, and gave little indication of the timing for the next rate cut. Investors pared back their bets on Fed easing for this year, and the US Dollar rallied further across the board.

The focus this Thursday will be on the US PCE Price Index report, the Fed's inflation gauge of choice that might provide some further insight about the central bank's monetary policy, ahead of Friday's all-important Nonfarm Payrolls report.

Source: Fxstreet