The EUR/USD pair backslid to the 1.0900 level on Thursday as the US Dollar regained ground. The European Central Bank (ECB) decided to keep rates steady amidst cautious monitoring of inflation. With this decision in place, traders are now looking ahead to next week’s pan-EU inflation figures to assess the possibility of further rate cuts from the ECB in the future.
The US Initial Jobless Claims for the week ended July 12 showed an increase that exceeded expectations, adding 243K new unemployment benefit seekers. This data, along with softening labor market data, is strengthening market expectations for a potential rate cut from the Federal Reserve in September. Currently, the markets are already pricing in nearly 100% odds of a quarter-point rate cut from the Federal Open Market Committee (FOMC) on September 18.
In terms of percentage changes this week, the Euro performed strongest against the New Zealand Dollar. The Euro against the US Dollar, Pound Sterling, Japanese Yen, Canadian Dollar, Australian Dollar, and Swiss Franc all experienced fluctuations. Traders are closely monitoring these changes to gauge the overall strength and stability of the Euro against major currencies.
The Euro saw its worst trading day in over a month recently, dropping back to the 1.0900 handle after reaching a four-month high just below 1.0950. While intraday price action is currently above the 200-hour Exponential Moving Average (EMA) at 1.0879, further declines could trigger a bearish trend for the EUR/USD pair. If the pair continues to struggle around the 1.0900 level, it could potentially fall below June’s recent lows.
The Euro is the currency for the 20 European Union countries in the Eurozone and is the second most heavily traded currency in the world after the US Dollar. The European Central Bank (ECB) plays a significant role in managing the Eurozone’s monetary policy and interest rates. Data releases, such as inflation levels and economic indicators, can impact the Euro’s value. The Trade Balance of a country is also an important indicator for the Euro, as it reflects the difference between exports and imports and can influence the currency’s strength.
In conclusion, the recent developments in the EUR/USD pair suggest a cautious market sentiment with traders closely monitoring economic data and central bank decisions. The upcoming inflation figures will be key in determining future rate cuts from the ECB. Investors will continue to weigh the impact of US economic data on the potential Fed rate cut in September. Overall, the Euro remains a currency of interest in the forex market, with its performance against major currencies influencing global trading activities.
