Euro/US dollar revives for four months, as the US dollar fell on the concern of slowdown in the United States
- EUR/USD advances over 1.0900, as the US dollar extends its negative side amid increasing concerns about American economic expectations.
- The euro acquires, while German Greens agreed to support defensive spending plans.
- Investors are waiting for Jolts job opening data in January and consumer price index data for February.
EUR/USD publishes the highest new level for four months above 1.0900 in European trading hours on Tuesday. It strengthens the main currency pair as the US dollar (the US dollar) weakens its peers amid concerns about an escalation of economic slowdown in the United States (the United States). The US dollar index (DXY), which tracks the value of Greenback for six main currencies, has updated the lowest level in four months near 103.30.
Investors recently threw the US dollar amid warning that the American economy may face economic shocks in the short term due to President Donald Trump’s policies “America first”. Market participants expected Trump’s policies to be inflated and long -term growth, but they now see severe economic turmoil in the short term, assuming that American employers will bear the pressure of high tariffs.
Business owners are unlikely to bear the burden of health tariffs and will pass the influence on consumers. Such a scenario may lead to a sharp decrease in the total demand because high prices would reduce the purchasing power of consumers. The deepening of the Trump -led slowdown has increased the market expectations that the Federal Reserve (Fed) will reduce interest rates at the May Politics meeting. The possibility of the Federal Reserve reduced interest rates in May to 51 % from 37 % last day, according to the CME Fedwatch tool.
For more references on the monetary policy expectations of the federal reserve coach, investors will focus on the US consumer price index data (CPI) for February, which will be issued on Wednesday. An inflation data is expected to flow, but it remains higher than the 2 % FBI goal. On Friday, Federal Reserve Chairman Jerome Powell said at an economic forum at the Bath School at the University of Chicago that the Federal Reserve Policy is not in a “pre -cycle”, and we can maintain “policy control longer if inflation”.
In Tuesday’s session, investors will pay close attention to Jolts Jolts job opportunities for January, which will be published at 14:00 GMT. Economists expect that employers in the United States will spread 7.75 million new jobs, marginally higher than 7.6 million, seen in December.
Daily Digest Market Mark: USD as the euro excels
- The strength in the EUR/USD husband is also driven by the performance of EUR against his peers. The euro is in the hope that the Franzeska Bernner, led by the Alevi Party, will support the defensive spending deal, which will be discussed on Thursday. Amal Al -Khidr hopes to extend the borrowing limit in Germany after a positive comment from Franzeska Barnner in an interview with Bloomberg on Tuesday during the European hours.
- “Of course, we are ready to negotiate,” said Franzeska Brantner, head of the Green Party, and added: “The situation is offensive in Ukraine and we really need to accelerate its defensive spending.” Earlier, the Greens pledged to oppose “debt reforms”. On Monday, Branter said that their party will not likely allow the upcoming consultant Fredchiich Mirz and the co -worker in the Democratic Democratic Party (SDP) Lars Klingille “misuse of a difficult European security situation.”
- The joint currency was vigorously for nearly two weeks as an increase in the ability to spend in Germany by expanding “debt brakes” that would stimulate the economy, which was broken and contracted in the past two years.
- In addition, German spending plans also forced traders to reassess the bets that support the European Central Bank (ECB) to reduce interest rates twice by summer. The European Central Bank has already reduced borrowing rates twice this year, and traders have been fully priced in discounts in other interest rates amid steadfast confidence that the euro zone enlargement will be sustainable to the required rate of 2 % this year and fears of slowdown due to possible US tariffs.
Technical Analysis: Euro/USD climbs over 1.0900
Euro/US dollar jumps over 1.0900 on Tuesday. The main currency pair was reinforced after a decisive outbreak of the highest level on December 6 of 1.0630 last week. Long -term forecast for the main currency pair is a thunderbolt because it exceeds the 200 -day SIA moving average (EMA), which trades around 1.0640.
The relative strength index jumps for 14 days (RSI) to approximately 75.00, indicating a strong upper momentum.
Looking down, the highest level on December 6 of 1.0630 will serve as the main support area of the husband. On the contrary, the 1.1000 psychological level will be a major barrier for euro bulls.
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. The 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.
