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- The EUR/USD pair is trading back and forth above the 1.0900 level amid interest rate uncertainty between the Federal Reserve and the European Central Bank.
- The European Central Bank is expected to cut interest rates twice more this year.
- Lower-than-expected U.S. initial jobless claims offered relief from widespread risk aversion.
EUR/USD The pair is trading sideways above the 1.0900 round-figure support level in the New York session on Friday. The major currency pair is trading within a trading range on Thursday, as investors look for fresh signals to indicate the strength of the downtrend. European Central Bank and the united states Federal Reserve (Central Bank) will cut interest Rates this year.
The European Central Bank is expected to cut interest rates twice more this year as the eurozone economy struggles and price pressures move back toward the 2% target. However, ECB officials continue to refrain from committing to a predetermined path for rate cuts as they forecast the path toward the central bank’s 2% target.
“Inflation continues to slow but the path to the 2% target remains bumpy this year,” ECB policymaker Olli Rehn, from Finland, said in a speech on Wednesday, adding that lowering interest rates would help. Eurozone Reuters indicated that the global economy has begun to recover, especially “fragile” industrial growth and weak investments.
Daily Market Movers Summary: EUR/USD Rises Amid USD Weakness
- The EUR/USD pair maintains its gains above the 1.0900 level as the US dollar declines amid strong expectations of a rate cut by the Federal Reserve. US Dollar Index (DXY), which tracks the value of the dollar against six major currencies, is trading near 103.00 after correcting from a four-day high of 103.50.
- Expectations of a Fed rate cut have risen sharply this week after the US weakened. Non-agricultural sector salaries (NFP) for July, released last Friday, raising concerns that the economy is entering a recession. This has reinforced risk aversioncausing global stock markets to sell off heavily on Monday.
- Meanwhile, concerns about a weak US labor market eased after preliminary data came in lower than expected. Unemployment claims Data released Thursday showed the number of individuals filing for first-time unemployment benefits fell short of estimates of 240,000 and the previous data of 250,000 (revised upward from 249,000).
- Commenting on the latest jobless claims data, Gennady Goldberg, head of U.S. interest rate strategy at TD Securities in New York, said: “This is very positive data for the markets in general. It confirms the fact that labor market momentum is not slowing to the same degree as the payrolls report, and that there are no major layoffs in the economy.”
- Investors are divided on the size of the Fed’s rate cuts in September, according to the CME FedWatch tool. Data on 30-day federal funds futures prices show traders see a 54.5% chance of a 50 basis point rate cut in September, down from 74% a week ago.
Euro price today
The table below shows the percentage change in the value of the Euro (EUR) against the major currencies listed today. The Euro was the strongest against the Australian Dollar.
| euro | US Dollar | GBP | JPY | Almost | Australian Dollar | New Zealand Dollar | Swiss Franc | |
|---|---|---|---|---|---|---|---|---|
| euro | 0.02% | -0.01% | 0.00% | 0.07% | 0.23% | -0.04% | -0.22% | |
| US Dollar | -0.02% | -0.05% | -0.07% | 0.05% | 0.21% | -0.05% | -0.25% | |
| GBP | 0.01% | 0.05% | 0.02% | 0.07% | 0.25% | -0.03% | -0.19% | |
| JPY | 0.00% | 0.07% | -0.02% | 0.06% | 0.26% | -0.03% | -0.18% | |
| Almost | -0.07% | -0.05% | -0.07% | -0.06% | 0.16% | -0.09% | -0.27% | |
| Australian Dollar | -0.23% | -0.21% | -0.25% | -0.26% | -0.16% | -0.27% | -0.44% | |
| New Zealand Dollar | 0.04% | 0.05% | 0.03% | 0.03% | 0.09% | 0.27% | -0.17% | |
| Swiss Franc | 0.22% | 0.25% | 0.19% | 0.18% | 0.27% | 0.44% | 0.17% |
The heat map shows the percentage changes in major currencies against each other. The base currency is selected from the left column, while the quote currency is selected from the top row. For example, if you select the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will be EUR (base)/USD (quote).
Technical Analysis: EUR/USD Remains Above 1.0900
The EUR/USD pair is trading near the upper boundary of the channel formation on the daily time frame. A breakout of the above-mentioned chart pattern is leading to increased trading ranges on the upside and heavy trading volume. The 200-day exponential moving average (EMA), near 1.0800, has been acting as a major support for the EUR bulls.
The 14-day Relative Strength Index (RSI) is back in the 40.00-60.00 range. If the RSI rises above 60.00, bullish momentum will be stimulated.
The major currency pair is expected to rise if it breaks Monday’s high at 1.1009. This would push EUR/USD towards the August 10, 2023 high at 1.1065, followed by the circular resistance level at 1.1100.
In an alternative scenario, a drop below the August 1 low of 1.0777 could drag the pair towards the February low of 1.0700. A breakdown below the latter level could expose the pair to the June 14 low of 1.0667.
Frequently Asked Questions About the Euro
The euro is the currency used in the twenty member states of the European Union that belong to the eurozone. It is the second most traded currency in the world after the US dollar. In 2022, it will reach 1.2 trillion euros. It has been calculated. This pair accounts for 31% of all foreign exchange transactions, with an average daily trading volume of over $2.2 trillion per day. The EUR/USD currency pair is the most traded pair in the world, accounting To get a discount of around 30% on all transactions, followed by EUR/JPY (4%), EUR/GBP (3%), and EUR/AUD (2%).
The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank of the eurozone. The ECB sets interest rates and conducts monetary policy. The ECB’s primary mission is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is to raise or lower interest rates. Relatively high interest rates—or the expectation of higher interest rates—are generally good for the euro and vice versa. The Governing Council of the ECB makes monetary policy decisions at meetings held eight times a year. The decisions are made by the heads of the eurozone’s national banks and six permanent members, including the president of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the Harmonized Index of Consumer Prices, is an important economic barometer for the euro. If inflation rises more than expected, especially if it is above the European Central Bank’s 2% target, it forces the ECB to raise interest rates to bring it back under control. The euro typically benefits from relatively high interest rates relative to its peers, as they make the region more attractive as a place for global investors to park their money.
Data released measures the health of the economy and can influence the euro. Indicators such as GDP, manufacturing and services PMIs, employment and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the euro. Not only does it attract more foreign investment, it can encourage the European Central Bank to raise interest rates, which would directly boost the euro. Otherwise, if economic data is weak, the euro is likely to fall. Economic data from the four largest economies in the eurozone (Germany, France, Italy and Spain) is of particular importance, as they account for 75% of the eurozone economy.
Another important piece of data released by the euro is the trade balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period of time. If a country produces highly demanded exports, its currency will gain value purely from the extra demand generated by foreign buyers seeking to purchase these goods. Thus, a positive net trade balance strengthens the currency and vice versa for a negative balance.
