- Euro/USD softens about 1.1415 in a session on Tuesday, Asian.
- Pesent said it was up to China to calm the trade war.
- Traders raise their bets on European Central Bank price discounts.
The edges of the euro/US dollar pair are less than 1.1415 during the early Asian session on Tuesday. The euro (EUR) weakens against the US dollar (USD) amid increasingly stakes for further discounts in prices from the European Central Bank (ECB) in June. Investors are preparing for more developments in the American commercial policy before issuing the expected salary statements in the United States on Friday.
US President Donald Trump said there was progress and spoke with Chinese President Xi Jinping, although Beijing had denied that commercial negotiations were taking place. US Treasury Secretary Scott Bessin said he had interactions with the Chinese authorities last week, but he did not mention the definitions.
Pesin said on Monday that the United States government is in contact with China, but it is up to take the first step in eliminating the escalation of the identification battle with the United States due to the imbalance between the two countries. Investors will closely see the relationship of the United States of China. Trump’s chaotic trade policy has led to the belief of American assets, and the common currency has appeared as an alternative destination for investor criticism. Any signs of escalation in the American -Chinese trade war can affect Greenback and serve as the back wind of EUR/USD.
Through the blessing, Reuters reported on Saturday that the European Central Bank policy makers were increasingly confident in lowering interest rates in June as inflation continues. The European Central Bank of the European Central Bank said on Monday that the central bank may reduce interest rates below the neutral level that keeps the economy in the balance.
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.
