Despite some early buying activity, EUR/USD's momentum retreated sharply on Wednesday, remaining stable around the 1.1200 mark. Most of the European economic data this week failed to attract market attention, which is also normal. However, a double whammy of key inflation data from the U.S. provided many traders with something to discuss.

Germany’s final Harmonized Consumer Price Index (HICP) for April on Wednesday came in exactly as expected, while data from the US was middling, providing the market with some breathing room between the Consumer Price Index (CPI) inflation data due on Tuesday and the Producer Price Index (PPI) inflation data due on Thursday.

Core PPI inflation is expected to fall to 3.1%, down from 3.3%. While the easing of inflationary pressures is positive, market concerns are growing about the impact of tariffs, which are expected to affect overall economic data starting in May.