The Euro US Dollar (EUR/USD) exchange rate trends higher for a third straight session, pushing back above the closely watched US$1.1800 level.

The push higher comes despite data confirming deflation in Germany, where consumer prices declined -0.5% in July, compared to the previous month. The data contrasts sharply with consumer prices in the US which surged +0.6% month on month in the same period.

However, the US Dollar is under pressure as US lawmakers fail to agree on an additional stimulus package. With 16 million Americans out of work fears are growing that the US economic recovery could stall without additional fiscal support.

US jobless claims data later today could confirm weakness in the labour market recovery with 1.12 million initial claims forecast.