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- EUR/USD faces pressure after Rehn suggested from the European Central Bank that the central bank could consider reducing interest rates at its next meeting.
- The euro sensitive to the risks found some support from renewed optimism about the United States of Chinese trade talks held in Geneva.
- Investors are now viewing Washington’s response to the proposed counter measures of the European Commission against the American definitions.
EUR/USD is back from the gains published in the previous session, as it is circulated near 1.1240 during the Asian session on Monday. EURO (EUR) faces pressure as the official OLLi Rehn drawings of the European Central Bank (ECB) last week that the European Central Bank may consider reducing interest Rates At its next meeting – the upcoming forecasts confirm a continuous trend of inflation and slow economic growth.
despite this , The pair of the euro/US dollar I found some support from the optimism surrounding the commercial talks between the United States of China held in Geneva. Both sides were “great progress” after two days of negotiations aimed at eliminating the escalation of the ongoing trade conflict. The Chinese Deputy Prime Minister, who Lifeg described as discussions as a “important step” in stabilizing bilateral relations, while US Treasury Secretary Scott Payette echoed the feelings, noting a meaningful progress.
The markets are now awaiting Washington’s response to the proposed anti -UNHCR measures against US definitions. On Thursday, the committee launched a general consultation that determines the potential customs tariffs of up to 95 billion euros of imports in the United States.
At the same time, the American economic Expectations It is still uncertain. Federal Reserve (Federal Reserve) officials reported the risk of stagnation, with the governor Michael Bar warned that the increasing definitions can disrupt supply chains – which leads to high inflation while relieving growth and increased unemployment. Investors are still cautious, as the additional escalation in commercial tensions may constitute serious challenges to the American economy.
Common questions euro
The euro is the currency of the 19 European Union countries belonging to the eurozone. It is the second most traded currency in the world behind the US dollar. In 2022, it represented 31 % of all foreign exchange transactions, with an average daily rotation of more than $ 2.2 trillion per day. EUR/USD is the most trading currency pair in the world, which represents an estimated 30 % of all transactions, followed by EUR/JPY (4 %), EUR/GBP (3 %) and EUR/AUD (2 %).
The European Central Bank (ECB) in Frankfurt, Germany, is the backup bank. The European Central Bank sets interest rates and runs monetary policy. The primary mandate in the European Central Bank is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary performance is to raise or reduce interest rates. Relatively high interest rates – or expect higher rates – usually benefit from the euro and vice versa. The Board of Directors of the European Central Bank is making monetary policy decisions at eight times a year. Decisions are made by the heads of national banks in the eurozone and six permanent members, including the President of the European Central Bank, Christine Lagarde.
The inflation data in the euro area, measured by a coordinated index of consumer prices (HICP), is an important economist for the euro. If inflation increases more than expected, especially if it is 2 % higher than the European Central Bank’s goal, then the European Central Bank is obliged to raise interest rates to return it in control. Relatively high interest rates usually benefit compared to its euro counterparts, as it makes the region more attractive as a place for global investors to stop their money.
Data ejaculates a measurement of economics health and can affect the euro. Indicators such as GDP, manufacturing, PMIS, employment services, and consumer morale surveys can affect the trend of uniform currency. The strong economy is useful for the euro. Not only is to attract more foreign investment, but the European Central Bank may encourage interest rates, which will enhance the euro directly. Otherwise, if economic data is weak, the euro is likely to decrease. Economic data of the four economies in the eurozone (Germany, France, Italy and Spain) are of particular importance, because it represents 75 % of the eurozone economy.
Other important version of the euro is the commercial balance. This indicator measures the difference between what a country gains from its exports and what it spends on imports during a certain period. If a country produces very absolute after exports, its currency will obtain a purely value of the additional demand created from foreign buyers who seek to buy these goods. Therefore, the positive and positive trade balance enhances the currency and vice versa to achieve a negative balance.
