Danske Research sees a scope for EUR/USD to resume its decline following yesterday post-CPI rebound.
"EUR/USD rebounded slightly and US interest rates dropped back after US CPI releases came out just below the consensus expectation. In our view, it is likely to only be a temporary set back in the downwards trend in EUR/USD and upwards trend in interest rates. We note that even though CPI inflation did not surprise on upside for the first time since February, inflation remains elevated and above 2% on an annualised basis," Danske notes.
"Hence, the release should not have material impact on Fed's pending decision to start tapering bond purchases. A string of Fed speakers following the release further hinted in that direction," Danske adds.