- The EUR/USD bounces sharply about 1,1400 while the US dollar goes back due to erratic Trump fees ads.
- The ECB is expected to cut interest rates in 25 PBS on Thursday.
- The Minister of Economy of Spain, body, trusts a balanced and just commercial agreement between the EU and the USA.
The EUR/USD is strongly recovering about 1,1390 during the European negotiation hours on Wednesday after a slight correction on Tuesday. The main currency pair is strengthened as the US dollar (USD) resumes its downward trajectory after a short -term recovery movement. The dollar index (DXY), which follows the value of the dollar against six main currencies, falls about 99.40.
Participants of the financial market are prepared for more weakness in the US dollar and a greater rise in the EUR/USD in the midst of growing doubts about the structural attraity of the dollar due to the erratic fees ads of the president of the United States (USA), Donald Trump.
Ing Ven analysts at the EUR/USD moving around 1,1500 due to the “weakness of the American dollar appeal as a safe reserve and refuge asset”, while the “high liquidity of the euro (EUR)” “” “” “absorb a large part of the rotation away from the USD is expected.”
Last week, President Trump declared a 90 -day break in the execution of reciprocal rates, except for China. Trump increased additional tariffs on Chinese imports to 145% in retaliation due to reciprocal taxes. Investors doubt that the decision has been well thought out, since American importers would have to increase the prices of Chinese goods substitutes to compensate for the impact of sustained demand. Such scenario will be inflation and decelerate economic growth.
In Wednesday’s session, investors will focus on US retail sales data for March, which will be published at 12:30 GMT. It is estimated that retail sales data, a key measure of consumer spending, have grown at a robust rate of 1.3% during the month compared to the 0.2% increase seen in February.
What moves the market today: the EUR/USD wins as the euro works strongly before the ECB
- The EUR/USD firmly quotes about 1,1400 while the euro demonstrates fortress before the monetary policy of the European Central Bank (ECB) on Thursday. The ECB is expected to cut its deposit rate at 25 basic points (PBS) up to 2.25%. This would be the sixth consecutive cut of interest rates by the ECB.
- The operators have become increasingly confident that the ECB will cut the interest rates on Thursday due to a significant slowdown in the inflation of eurozone services. Underlying inflation increased by 3.4% year -on -year in March. This was the lowest growth in the inflation of services since July 2022.
- As investors trust an interest rate cut on Thursday, they will pay special attention to the monetary policy perspectives and how the European Commission (EC) is handling the commercial agreements with the US with the USAs of Standard Chartered Bank expect: “If the ECB cuts this month, then the June meeting could offer an opportunity to maintain, which for now is our base case.” They added that the market would be more clarity about the tax stimulus plans of Germany, as well as on the increase in the broader defense expenditure for the June meeting, which could impact their expectations.
- Meanwhile, the Spanish Economy Minister, Carlos Body, is confident that the European Union (EU) and the US will close a fair agreement soon. Corps won a strong conviction on a fluid trade agreement between the EU and Washington after meeting with the US Treasury Secretary, Scott Besent, on Tuesday. “We are convinced that, with the EU Commission of Commerce, Maros Sefcovic, leading the European negotiation, we can reach an agreement that is balanced, fair and beneficial for both parties,” said body, according to Reuters.
Technical analysis: EUR/USD rises about 1,1400
The EUR/USD jumps about 1,1400 in the European session on Wednesday. The general perspective of the main currency pair is strongly bullish, since all long -term exponential mobile socks (EMAS) have an ascending slope.
The 14 -day relative force (RSI) index remains above 70.00, indicating a strong bullish impulse.
Looking up, the psychological resistance of 1,1500 will be the main resistance for the torque. On the contrary, the minimum of April 11, 1,1190 will be the key support for the euros of the euro.
Euro Faqs
The euro is the currency of the 19 countries of the European Union that belong to the Eurozone. It is the second most negotiated currency in the world, behind the US dollar. In 2022, it represented 31 % of all foreign exchange transactions, with an average daily business volume of more than 2.2 billion dollars a day. The EUR/USD is the most negotiated currency pair in the world, with an estimate of 30 %of all transactions, followed by the EUR/JPY (4 %), the EUR/GBP (3 %) and the EUR/AU (2 %).
The European Central Bank (ECB), based in Frankfurt (Germany), is the Eurozone reserve bank. The ECB establishes interest rates and manages monetary policy. The main mandate of the ECB is to maintain price stability, which means controlling inflation or stimulating growth. Its main tool is the rise or decrease in interest rates. Relatively high interest rates (or the expectation of higher types) usually benefit the euro and vice versa. The GOVERNMENT BOOK of the ECB makes decisions about monetary policy in meetings that are held eight times a year. The decisions are made by the directors of the National Banks of the Eurozone and six permanent members, including the president of the ECB, Christine Lagarde.
Eurozone inflation data, measured by the harmonized consumer prices index (IPCA), are an important economic indicator for the euro. If inflation increases more than expected, especially if it exceeds 2% of the ECB, it forces the ECB to rise interest rates to control it again. Relatively high interest rates compared to their counterparts usually benefit the euro, since they make the region more attractive as a place for global investors to deposit their money.
Published data measure the health of the economy and can have an impact on the euro. Indicators such as GDP, manufacturing and services PMIs, employment and consumer trust surveys can influence the direction of the single currency. A strong economy is good for the euro. Not only attracts more foreign investment, but it can encourage the ECB to raise interest rates, which will directly strengthen the euro. Otherwise, if economic data is weak, the euro is likely to fall. The economic data of the four largest economies in the euro zone (Germany, France, Italy and Spain) are especially significant, since they represent 75% of the economy of the euro area.
Another important fact that is published on the euro is the commercial balance. This indicator measures the difference between what a country earns with its exports and what you spend on imports during a given period. If a country produces highly demanded export products, its currency will gain value simply by the additional demand created by foreign buyers seeking to buy those goods. Therefore, a positive net trade balance strengthens a currency and vice versa in the case of a negative balance
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
