EUR/USD trades quietly below 1.1700 as investors await fresh cues on US-EU trade talks

• EUR/USD stabilizes around 1.1670 ahead of the US CPI data for June.
• The US inflation is expected to have grown at a faster pace on both a monthly and yearly basis.
• The EU prepares with proportionate countermeasures if it fails to reach a deal with the US.

The EUR/USD pair trades calmly around 1.1670 during the Asian trading session on Tuesday. The major currency pair oscillates in a limited range, with investors awaiting fresh development on trade negotiations between the United States (US) and the European Union (EU).

On Monday, US President Donald Trump confirmed that Washington is still in talks with Brussels to secure a trade pact before the August 1 deadline, despite having announced 30% tariffs on imports from the EU over the weekend.

Meanwhile, a report from Bloomberg has stated that the 27-nation trading bloc is prepared with proportionate countermeasures if it fails to ink a deal with the US in order to safeguard its interests. The report showed that the European Commission (EC) has finalized a new list of potential tariffs targeting $84 billion (€72 billion) worth of US goods, including aircraft made by Boeing Co., automobiles, bourbon, agricultural products, chemicals, and machinery.

In Tuesday's session, the US Consumer Price Index (CPI) data for June will be the key trigger for the pair, which will be published at 12:30 GMT. Investors will pay close attention to the US inflation data as it will indicate the impact of sectoral tariffs on price pressures. The US headline inflation is estimated to have grown at a faster pace of 2.7% on year, compared to 2.4% in May. In the same period, the core CPI - which excludes volatile food and energy prices - rose at a faster pace of 3%, compared to the prior release of 2.8%. Month-on-month headline and core CPI are expected to have grown strongly by 0.3%.

Signs of price pressures accelerating would force traders to pare bets supporting interest rate cuts by the Federal Reserve (Fed) in the September policy meeting. The Fed is almost certain to leave interest rates unchanged in the 4.25%-4.50% range in the policy meeting later this month.