No major events are expected today.

The Euro-Dollar pair is trading slightly higher around the 1.0860 mark at the start of the Asian trading session on Monday. The major pair is rising as traders widely anticipate a rate cut by the U.S. Federal Reserve (Fed) in September, which is pulling the dollar down.

U.S. inflation, as measured by the change in the Personal Consumption Expenditures (PCE) price index, eased slightly in June compared to a year earlier, setting the stage for a Fed rate cut in September. U.S. PCE inflation continued to slow in June, from a 2.6% annual increase in May to 2.5% in June. On a monthly basis, the PCE index rose by 0.1% in June after being flat in May. The core PCE price index—the Fed’s preferred gauge of annual inflation—rose 2.6% year-over-year in June, compared to 2.5% in May, according to Commerce Department data released on Friday.

However, the decline in U.S. inflation in June is not sufficient for the Fed to start cutting rates at the August meeting on Wednesday. Analysts at Morgan Stanley noted that “significant progress on inflation” would allow the Fed to move closer to rate cuts, adding that they expect three cuts this year, starting with the September FOMC meeting. According to the CME FedWatch Tool, financial markets have priced in almost a 90% probability of a Fed rate cut in September, followed by another cut in November and December.

Recommendations: Predominantly trade with Buy orders from the current price levels.