EUR/USD hovers near1.1030 during the Asian session on Tuesday post pulling back from the recent high of 1.1139 reached on Thursday. In the year 2023, the EUR/USD pair closed at 1.1036, up by 3.16% after two consecutive years of decline. The pair received upward support in the previous three months as the market recently witnessed a slight decline in United States (US) inflation.The US Dollar Index (DXY) trades around 101.40 after posting gains in the recent sessions. However, the DXY faces challenges as the market bets on the dovish stance of the US Federal Reserve (Fed) about the interest rate trajectory in early 2024.The Chicago Purchasing Managers Index released by ISM-Chicago on Friday showed that business conditions across Illinois, Indiana, and Michigan reduced to 46.9 in December from the previous 55.8.The market participants witnessed a decline in the recent US labor data, Core PCE Inflation, and GDP Annualized. These figures confirm the theory that the US economy is losing pace in the fourth quarter, and on its way to a soft landing. This strengthens the case for Fed rate cuts in 2024 and adds negative pressure on the USD.In the Eurozone, Consumer Inflation declined in November but yearly figures remain above the 2.0% target. In contrast, December’s PMI report showed easing in both services and manufacturing. The annual Spanish consumer prices have held firm at 3.3%, signaling persistent inflation in certain European countries. This could reinforce the European Central Bank’s (ECB) hawkish stance and provide a solid foundation for Euro support.Traders await more data from the Eurozone for fresh impetus including Harmonized Index of Consumer Prices data due on Friday. On the US docket, ISM Manufacturing PMI figures and Meeting Minutes from the Federal Open Market Committee (FOMC) will be eyed on Wednesday.EUR/USD
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