- The euro/the US dollar fell slightly lower on Wednesday after testing the low side.
- The Federal Reserve kept fixed rates, as expected widely.
- With the latest rate of rates in the Federal Reserve, the markets are waiting for the main US data to see if they are right.
EUR/USD was drifted to the low side on Wednesday, as it fell to less than 1.0400 before it was pushed again to the touch range of opening bids today. The Federal Reserve (Federal Reserve) only spared few notes in its latest price calls, which raised a slight rise in volatility, but a significant momentum where fiber traders awaited actual changes in interest rates, or at least some of the signals that may come.
The GDP growth will be reported for the fourth quarter in the United States on Thursday. The average market expectations expect a decrease in the growth of the annual gross domestic product, by dropping 2.6 % compared to the previous 3.1 %. Ability pressure is still a concern, and the GDP price index is expected to increase to 2.5 % of 1.9 %.
The Basic Personal Consumption Index will be printed in December (PCEPI) on Friday. It is expected that the monthly PCEPI number of December will rise to 0.2 % in the month from 0.1 % from the previous month, and the annual number is expected to remain fixed at 2.8 % on an annual basis, and its frustration remains more than 2 % of the annual targeted and difficult hopes of acceleration in The pace of interest rate changes.
The Federal Reserve (Fed) maintained its prices on Wednesday, as the future markets expected to a large extent, and the Federal Reserve Chairman Jerome Powell stressed the approach that depends on data at the Federal Reserve in price amendments. President Powell indicated that the FOOC Open Market Committee is closely monitoring the policies given by US President Donald Trump. However, he denied that the newly -elected president was in direct contact with the Federal Reserve.
As an independent federal institution, the White House has a limited impact on the policy guidelines set by the Federal Reserve. President Powell repeated that although inflation is moving towards the target intermediate levels, the current economic scene, along with concerns about the large commercial policies followed by President Trump, indicates that the Federal Reserve is not in a hurry to change policy prices. Price markets reduced its expectations for FBI price discounts in 2025. According to the Fedwatch tool for the CME, futures markets are not pricing in any changes to the federal funds rate until June as soon as possible.
Euro/dollar price expectations
EUR/USD is suspended in artistic congestion on the 50 -day SIA moving average (EMA) near 1.0450, but it appears that both bulls and bears have run out of gas. The fibers are still covered with less than 1.0500 handle, and the negative side can not compress a momentum less than 1.0400.
The euro graph/daily dollar
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 basic mandate of 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.
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