EUR/USD Sees Muted Reaction as German CPI Confirms 2.3% Decline

EUR/USD showed minimal reaction as Germany's final June CPI data confirmed headline annual inflation at 2.3%, matching the preliminary estimate and marking a notable decline from the prior month's 2.6% reading. The harmonized index of consumer prices (HICP) was also confirmed at 2.4% year-over-year, down from 2.7% previously. The continued disinflation trend in Europe's largest economy strengthens the case for the ECB to maintain or potentially accelerate its easing cycle, as price pressures move closer to the central bank's 2% target. Core prices also held steady at preliminary levels, suggesting broad-based cooling across consumer categories. The data reinforces the dovish narrative surrounding the euro, though traders are reluctant to take large positions ahead of Tuesday's US CPI release, which is expected to be the week's key event for EUR/USD direction. A dovish ECB backdrop combined with resilient US inflation could create further downside pressure on the pair in the near term.