EUR/USD recently reached a 13-month high, climbing above 1.1150 as investors anticipate a rate cut in September. The US Dollar is being sold off across the board, with markets hopeful for a quarter-point cut from the Federal Reserve (Fed) on September 18. There is also speculation about the possibility of a double cut, with almost 40% odds being priced in for a 50 basis points cut by the Federal Open Market Committee (FOMC) in September.
The Purchasing Managers Index (PMI) survey results in Europe and the US are anticipated soon, with the EU Manufacturing and Services PMIs expected to hold steady. In the US, the S&P Global Manufacturing PMI is forecasted to remain at 49.6 while the Services PMI may decrease to 54.0. The beginning of the Jackson Hole Symposium is also scheduled for Thursday, drawing significant investor attention.
EUR/USD continues to show bullish momentum, with the pair rising to 1.1174. The pair has recorded gains of over 3.5% since its last low at 1.0800, supported by a high-low pattern in daily candlesticks. With the Eurozone economy showing resilience and the pair heading towards the 1.1200 mark, there is optimism in the market for further gains in the coming days.
The Euro is the currency for 20 European Union countries in the Eurozone and is the second most traded currency globally. The European Central Bank (ECB) is responsible for managing the Eurozone’s monetary policy, with a primary focus on maintaining price stability. Inflation data, economic indicators, and trade balance are key factors that influence the Euro’s value in the foreign exchange market.
High interest rates or the expectation of a rate hike by the ECB tend to benefit the Euro, while weak economic data can lead to a decline in the currency value. Strong economic indicators, such as GDP, PMIs, and consumer sentiment surveys, can attract foreign investment and strengthen the Euro. Additionally, a positive trade balance can enhance a currency’s value, reflecting strong export demand and economic performance. Overall, economic data and monetary policy decisions play a crucial role in determining the Euro’s performance in the Forex market.
