• EUR/USD finds temporary support near 1.0900 as the Euro outperforms its major peers.
• The Euro gains despite firm ECB dovish bets amid a faster-than-expected decline in Eurozone inflationary pressures.
• Investors await the US PPI for fresh cues on the Fed’s interest rate outlook.

EUR/USD moves slightly higher to near 1.0950 on Friday after a sharp recovery from the two-month low of 1.0900 recorded on Thursday. The pullback move in the major currency pair could be short-lived as the US Dollar (USD) clings to gains ahead of the United States (US) Producer Price Index (PPI) data, which will be published at 12:30 GMT. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, holds onto gains near 103.00.

Investors will pay close attention to the US PPI data as it will indicate the pace at which prices of goods and services were raised by producers at factory gates in September. Producer inflation is majorly influenced by the change in input cost and households’ demand.

Economists expect the annual headline PPI inflation to have decelerated to 1.6% from 1.7% in August. The annual core PPI – which strips off volatile food and energy prices – is estimated to have accelerated sharply by 2.7% from the former release of 2.4%. The monthly headline and core PPI are expected to have grown at a slower pace of 0.1% and 0.2%, respectively.

The US Dollar is broadly upbeat as Atlanta Federal Reserve (Fed) Bank President Raphael Bostic has brought the option of leaving interest rates unchanged at 4.75%-5.00% in November on the table. 

The comments from Bostic in an interview with the Wall Street Journal on Thursday indicated that he is comfortable with skipping the interest rate cut next month. Bostic said, “This choppiness to me is along the lines of maybe we should take a pause in November and I'm definitely open to that.” His comments came after the release of the US Consumer Price Index (CPI) report, which showed that inflationary pressures rose at a faster-than-expected pace in September.