The euro edged slightly below $1.16 as investors awaited delayed US inflation data and preliminary PMI readings from major European economies due on Friday for further clues about the global monetary policy outlook. The US dollar found modest support from renewed optimism over US–China trade relations, after President Donald Trump expressed confidence that his upcoming meeting with President Xi Jinping would produce a “good deal” on trade. On the monetary policy front, softer-than-expected UK inflation data strengthened expectations that the Bank of England could begin cutting interest rates in the coming months, while markets view a 25-basis-point rate cut by the Federal Reserve in October as almost certain. The European Central Bank, by contrast, is not expected to begin easing until July 2026.