EUR/USD gains ground below the 1.0800 mark, investors await FOMC Minutes

The EUR/USD pair trades on a stronger note below the 1.0800 psychological barrier during the early Asian trading hours on Monday. Investors await the FOMC Minutes and Eurozone PMI data this week for fresh impetus. US markets are closed on Monday due to the President's Day holiday. At press time, the major pair is trading at 1.0788, adding 0.10% on the day.

On Friday, the US Producer Price Index (PPI), a measure of prices received by producers of domestic goods and services, climbed 0.3% MoM in January, the biggest move since August. The core PPI, excluding food and energy, increased 0.5% MoM in January, also against expectations for a 0.1% gain. On an annual basis, the headline PPI rose 0.9% YoY, while the Core PPI climbed 2.0% from the previous reading of 1.7%. 

The Federal Reserve (Fed) Chair Jerome Powell said the central bank needs greater confidence in inflation's downward trajectory before it can cut rates. The latest US economic data suggests more time may be needed. Traders will take more cues from the FOMC minutes for the January meeting, with the focus on any discussion around the timing of rate cuts. 

On the other hand, European Central Bank (ECB) President Christine Lagarde stated that the disinflation process would have to advance further for the central bank to be sure that it is sustainable. Lagarde warned against lowering interest rates too soon because wages might drive up inflation again later this year. Markets have priced in 113 basis points (bps) of rate cuts this year, down from 150 bps just weeks ago. 

The FOMC Minutes on Wednesday will be in the spotlight. Later this week, the preliminary Eurozone PMI data for February and US S&P Global PMI will be due on Thursday. These data could give a clear direction to the EUR/USD pair.