EUR/USD falls toward 1.1600 ahead of Eurozone HICP data

• EUR/USD loses ground ahead of the release of Eurozone Harmonized Index of Consumer Prices data.
• The US Dollar may further appreciate due to rising odds of the Fed maintaining its interest rates in July.
• President Trump mentioned the possibility of striking a deal with Europe.

EUR/USD retraces its recent gains from the previous session, trading around 1.1620 during the Asian hours on Thursday. Traders will likely observe Eurozone Harmonized Index of Consumer Prices (HICP) data scheduled to be released later in the day. Focus will shift toward the US Retail Sales data for June, due later in the North American session.

Additionally, the US Dollar (USD) may further gain ground due to rising odds of the Federal Reserve (Fed) maintaining its benchmark overnight interest rate unchanged in the 4.25%-4.50% range at its July policy meeting due to the tariff uncertainty.

US President Donald Trump said on Wednesday that he plans to send a single letter to over 150 countries, notifying them of a 10% tariff rate they will face. He emphasized that these are "not big countries" with limited trade ties to the US, unlike China or Japan. He also hinted the rate could rise to 15-20%, though he did not confirm any specifics.

Trump also said on late Wednesday that he would love for Fed Chair Jerome Powell to resign, but that it would disrupt the markets if the president were to remove him. He also mentioned the possibility of striking a deal with Europe. Regarding tariffs on Canada, he said it's too soon to comment. A tariff deal with India, however, is very close.

The hotter-than-expected June inflation figures from the United States (US) reignited concerns about prolonged high Fed interest rates. Dallas Fed President Lorie Logan said on Tuesday that the Fed will probably need to leave interest rates where they are for a while longer to ensure inflation stays low in the face of upward pressure from the Trump administration's tariffs. Moreover, New York Fed President John Williams said late Wednesday that monetary policy is in the right place to allow the Fed to monitor the economy before taking its next decision.