EUR/USD stays above 1.0900 on firm Fed rate-cut prospects
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EUR/USD trades back and forth above 1.0900 amid uncertainty over Fed-ECB interest rates. The ECB is expected to deliver two more rate cuts this year. Lower-than-expected US Initial Jobless Claims offered relief to widespread risk-aversion. EUR/USD trades sideways above the round-level support of 1.0900 in Friday’s New York session. The major currency pair trades inside Thursday’s trading range, with investors looking for fresh cues indicating how much the European Central Bank (ECB) and the US Federal Reserve (Fed) will cut interest rates this year. The ECB is expected to cut interest rates two times more this year as the Eurozone economy is going through a rough phase, and price pressures are on track to return to the desired rate of 2%. However, ECB officials continue to refrain from committing to a pre-defined rate-cut path as they expect the way towards the central bank’s target of 2%. On Wednesday, Finnish ECB policymaker Olli Rehn said in a speech, “Inflation continues to slow down but the path to the two percent target remains bumpy this year.” “He added the rate cuts would help the eurozone economy recover, in particular the “fragile” industrial growth and subdued investments,” Reuters reported. Daily digest market movers: EUR/USD edges higher amid subdued US Dollar EUR/USD holds gains above 1.0900 as the US Dollar (USD) edges lower on firm Fed rate-cut prospects. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades near 103.00 after correcting from a four-day high of 103.50. The expectations for Fed rate cuts rose significantly this week after the weak United States (US) Nonfarm Payrolls (NFP) report for July published last Friday, which prompted fears that the economy is entering a recession. This bolstered risk aversion, which caused global equity markets to face an intense sell-off on Monday. Meanwhile, fears of a weakening…
Filed under: News - @ August 9, 2024 11:26 pm