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The EUR/USD pair trades with mild losses and remains capped under the 1.1000 psychological mark during the early Asian trading hours on Wednesday.

Reaction to the Consumer Confidence and Existing Home Sales might be the focus on Wednesday. Asian shares finished mostly up, while European shares are trading notably higher.

The US Dollar is in better shape on Wednesday, advancing against most major rivals.

Robust risk-on sentiment was seen in the US markets overnight, with DOW extending its record-breaking run. S&P 500 is also approaching its historical peak, now just 50 points shy, and appears poised to challenge this high. The bullish momentum is underpinned by messages from Fed officials, suggesting that while an immediate rate cut is not anticipated, policy easing should be on the horizon for the second half of next year. This scenario hinges on the continued cooling of inflation as a trend as per current expectations.

Sterling faced a broad decline today following release of UK CPI data, which indicated that inflation slowed more significantly than anticipated. This unexpected deceleration in inflation has led markets and economists to quickly adjust their expectations for BoE rate cut. The markets are now fully pricing the first 25bps reduction as early as May, with projections suggesting interest rates could drop to 4% or lower by the end of 2024. Notably, Goldman Sachs has also moved forward its forecast for BoE's interest-rate cut from June to May.