The EUR/USD pair recorded a slight decline on Thursday (September 11th), trading at 1.1695, but remained within the previous day's narrow range at the start of the European session. Investors were reluctant to place directional bets, awaiting the outcome of the European Central Bank (ECB) monetary policy meeting and the release of the US Consumer Price Index (CPI) figures.

The ECB is expected to maintain its monetary policy stance. Focus will be on President Christine Lagarde's press conference to see if the unfavorable trade deal with the US and the uncertain political situation in several member countries have changed the central bank's recent stance. Traders will be looking for any dovish clues that might add bearish pressure on the Euro (EUR).

Later in the day, the US CPI release will be the final key data ahead of next week's Federal Reserve monetary policy meeting. Recent weak US employment data and Wednesday's low Producer Price Index (PPI) figure have virtually confirmed a September interest rate cut. With this in mind, the US August CPI data will be closely watched to determine the extent of the Fed's monetary easing next week, with the likelihood of a major 50 basis point cut increasing.

Beyond macroeconomic data, markets have begun to recover from news that Poland required assistance from NATO forces to shoot down a suspected Russian drone in its airspace. This issue has not yet had any further implications, but concerns about the Ukraine conflict spilling over into NATO territory have weighed on the euro over the past few sessions. (alg)

Source: FXstreet