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CFD Trading Rate Euro vs US Dollar (EURUSD)

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  • 19.07.2024 14:24
    EUR/USD: Broader bullish picture remains intact – Scotiabank

    The European Central Bank (ECB) policy decision came and went as expected—no change in rates and little in terms of forward guidance beyond reaffirming ‘data dependency’, Scotiabank’s chief FX strategist Shaun Osborne notes.

    EUR sees support in the mid/upper 1.08s

    “The usual post-meeting leaks around the tone of policy discussion indicated that ECB policymakers may see limited room for additional cuts and might only be able to reduce interest rates once more this year. Markets are still leaning towards the idea of two more cuts (45bps priced in for the remainder of 2024) but swaps and the Euro (EUR) will be sensitive to data that may make the hawks’ case for proceeding cautiously any stronger.”

    “The EUR has lost a little ground on the session but should see support in the mid/upper 1.08s in the short run. Just when the EUR looked set to extend gains, a big setback on the daily chart yesterday suggests more range trading for spot.”

    “Underlying dynamics for the EUR have weakened a little following losses Thursday and (so far) today but the broader bullish picture remains intact. That should mean that EUR losses will be corrective and might be relatively shallow before renewed gains. Look for support on dips to the low/mid 1.08s now.”

  • 19.07.2024 09:31
    EUR/USD declines to near 1.0870 as ECB Villeroy see rate-cut expectations as appropriate
    • EUR/USD slumps to near 1.0870 amid multiple headwinds.
    • ECB Villeroy sees prospects of two more rate cuts this year as appropriate.
    • The US Dollar recovers amid speculation that Donald Trump will win the US presidential elections.

    The EUR/USD pair corrects further to near 1.0870 in Friday’s European session. The major currency pair weakened due to multiple headwinds: firm speculation that the European Central Bank (ECB) will cut interest rates two times more this year and a sharp recovery in the US Dollar (USD).

    On Thursday, the ECB left key rates unchanged at their current levels. ECB President Christine Lagarde refrained from committing to a pre-defined rate-cut path.

    In Friday’s late Asian trading hours, ECB policymaker Francois Villeroy de Galhau said in an interview on French radio BFM Business that market expectations for the ECB delivering two more rate-cuts this year, with resuming the policy-tightening campaign from the September meeting and following in December as appropriate.

    Meanwhile, ECB’s Survey of Professional Forecasters (SPF) showed on Friday that price pressures will remains close to 2.4% and will return to 2.0% in 2025 as projected by ECB Lagarde in the press conference on Thursday. The agency has cut growth target for 2025 to 0.7% from prior estimates of 0.5%.

    On the other side of the Atlantic, the US Dollar bounces back strongly. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, moves higher to 104.30 from an almost four-month low of 103.70.

    The US Dollar recovers amid growing speculation that Donald Trump will come out victorious in the United States (US) presidential elections later this year.

    Economic Indicator

    ECB Rate On Deposit Facility

    One of the European Central Bank's three key interest rates, the rate on the deposit facility, is the rate at which banks earn interest when they deposit funds with the ECB. It is announced by the European Central Bank at each of its eight scheduled annual meetings.

    Read more.

    Last release: Thu Jul 18, 2024 12:15

    Frequency: Irregular

    Actual: 3.75%

    Consensus: 3.75%

    Previous: 3.75%

    Source: European Central Bank

     

  • 19.07.2024 08:34
    EUR/USD: A break below 1.0885 to signal further weakness – UOB Group

    The Euro (EUR) is expected to trade sideways between 1.0885 and 1.0935. Should EUR break below 1.0885, it would mean that the EUR strength from two weeks ago has come to an end, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

    Below 1.0885 the EUR to become weak

    24-HOUR VIEW: “Our expectation for EUR to test the significant resistance zone of 1.0970/1.0980 did not turn out, as EUR pulled back sharply, closing at 1.0896 (-0.37%). The pullback seems to be a bit overdone, and EUR is unlikely to weaken much further. Today, we expect EUR to trade sideways between 1.0885 and 1.0935.”

    1-3 WEEKS VIEW: “Two days ago, EUR soared to a high of 1.0947. Yesterday (18 Jul, spot at 1.0940), we indicated that ‘the rejuvenated upward momentum suggests further EUR strength, even though the 1.0970/1.0980 zone is expected to pose significant resistance.’ We did not anticipate the subsequent sharp pullback that resulted in a rapid loss of momentum. Should EUR break below 1.0885 (no change in ‘strong support’ level), it would mean that the EUR strength that started two weeks ago has come to end.”

  • 19.07.2024 03:55
    EUR/USD holds losses near 1.0900 due to increased risk aversion
    • EUR/USD depreciates as the US Dollar continues to gain ground on Friday.
    • Higher US Treasury yields contribute to underpin the Greenback.
    • ECB President Lagarde provided no hints about the stance for the next meeting, stating that September was "wide open."

    EUR/USD extends its losses for the second consecutive day, trading around 1.0890 during the Asian session on Friday. The decline in the EUR/USD pair can be attributed to the strengthening of the US Dollar (USD) amid increased risk aversion.

    The greenback is bolstered by rising US Treasury yields, but its upside potential may be constrained by soft labor data, which enhances market expectations for a Federal Reserve (Fed) rate cut in September.

    US Initial Jobless Claims increased more than expected, data showed on Thursday, adding 243K new unemployment benefits seekers for the week ended July 12 compared to the expected 230K, and rising above the previous week’s revised 223K.

    According to CME Group’s FedWatch Tool, markets now indicate a 93.5% probability of a 25-basis point rate cut at the September Fed meeting, up from 85.1% a week earlier.

    On the EUR front, The European Central Bank (ECB) decided to maintain its main refinancing rate at 4.25%, as expected, at its July Monetary Policy Meeting on Thursday. The ECB's deposit facility rate also remains unchanged at 3.75%.

    At the press conference following the interest rate decision, ECB President Christine Lagarde stated, "The question of September and what we do in September is wide open." Lagarde also noted that the monetary policy decision had been unanimous and emphasized the central bank's commitment to relying on a range of data rather than any single data point, according to Reuters.

    Euro FAQs

    The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

    Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

    Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

  • 18.07.2024 23:14
    EUR/USD gets dragged down by Greenback recovery as ECB stands pat once more
    • EUR/USD backlides to 1.0900 handle on Thursday as US Dollar flows recover lost ground.
    • The ECB held rates steady on Thursday as policymakers keep watching for inflation.
    • Fiber traders to turn toward next week’s pan-EU inflation figures.

    EUR/USD shed weight on Thursday, falling back into the 1.0900 key handle amid a broad-market recovery in Greenback bidding. An uptick in weekly US jobless claims helped to further support hopes for a September rate cut from the Federal Reserve (Fed), while the European Central Bank (ECB) balked in the face of lopsided economic data and opted to keep rates on hold for the time being.

    Forex Today: Investors’ attention now looks at Fedspeak

    With an ECB rate hold on the books for July, Fiber traders will be turning to next week’s pan-EU Harmonized Index of Consumer Prices (HICP) inflation data. Friday is a largely low-tier data showing for the Euro, leaving investors to sit and wait for next Tuesday’s inflation data to begin sussing out odds of a follow-up rate cut to the ECB’s initial rate trim in June.

    US Initial Jobless Claims increased more than expected on Thursday, adding 243K new unemployment benefits seekers for the week ended July 12 compared to the expected 230K, and rising above the previous week’s revised 223K. With labor data softening, market expectations of a September rate cut will be further bolstered, but bets for a Fed rate trim have nowhere left to go with markets already pricing in nearly 100% odds of a quarter-point rate cut from the Federal Open Market Committee (FOMC) on September 18.

    Euro PRICE This week

    The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the New Zealand Dollar.

      USD EUR GBP JPY CAD AUD NZD CHF
    USD   0.07% 0.32% -0.57% 0.44% 1.17% 1.04% -0.76%
    EUR -0.07%   0.28% -0.43% 0.57% 1.14% 1.18% -0.64%
    GBP -0.32% -0.28%   -0.63% 0.27% 0.85% 0.84% -0.92%
    JPY 0.57% 0.43% 0.63%   1.01% 1.53% 1.60% -0.38%
    CAD -0.44% -0.57% -0.27% -1.01%   0.66% 0.62% -1.20%
    AUD -1.17% -1.14% -0.85% -1.53% -0.66%   0.04% -1.76%
    NZD -1.04% -1.18% -0.84% -1.60% -0.62% -0.04%   -1.81%
    CHF 0.76% 0.64% 0.92% 0.38% 1.20% 1.76% 1.81%  

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

    EUR/USD technical outlook

    The Fiber saw its worst trading day in over a month on Thursday, flubbing recent bullish momentum and tumbling back into the 1.0900 handle after reaching a four-month high just shy of 1.0950. Intraday price action is still holding north of the 200-hour Exponential Moving Average (EMA) at 1.0879, but an extended slide could kick off another round of bearishness.

    EUR/USD has cycled the 200-day EMA at 1.0800 since last November, and another technical rejection from 1.0900 leaves the Fiber exposed to a bearish reversal. A shortside push could see the pair tumbling back to June’s recent lows below 1.0700.

    EUR/USD hourly chart

    EUR/USD daily chart

    Euro FAQs

    The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

    Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

    Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

     

  • 18.07.2024 14:07
    EUR/USD: ECB keeps its deposit rate unchanged – TDS

    As universally expected, the ECB left its policy rates on hold at today's meeting. The tone of the statement was roughly unchanged, but there were some growing signs of caution on the growth and employment outlooks, and the GC appears to be looking through the recent strength in underlying inflation, TDS FX analysts note.

    Rate differentials move in the EUR's favor

    As universally expected, the ECB kept its deposit rate unchanged at 3.75%% at today's meeting. The ECB meeting came with little new information. President Lagarde acknowledged the ongoing progress in domestic drivers of inflation. Tactically, we favour being long in EUR duration.

    Not much for the Euro (EUR) to nibble on here, leaving the price action mostly unchanged. No one was looking for fireworks today so focus will turn towards data and the outlook for inflation. Markets continue to expect another move in September. For EUR/USD, much of the focus has come from the US side, with rate differentials moving in the EUR's favor.

    For now, we think the USD has lots of bad news priced in, suggesting that EUR/USD provides good entry levels to fade the recent rally. Notably, our MRSI portfolios still lean long USD in most of the key macro portfolios, except rates. Currently, the risk, equity, carry, growth, and now short-term fair value (HFFV) are long the USD.

     

  • 18.07.2024 13:45
    EUR/USD: Approaching resistance – DBS

    EUR/USD appreciated by 2.1% to 1.0940 so far in July from its trendline support near 1.07, DBS senior FX strategist Philip Wee.

    A significant trendline resistance at 1.0970

    “This month’s rally was attributed to the European Central Bank’s signal at its forum in Sintra (on July 2) for a pause at today’s governing council meeting (which it did) vs. more Fed officials opening the door for a rate cut this year on US inflation resuming its decline amid over the rise in the unemployment rate.”

    Politically, the Euro (EUR) was relieved that the far-right National Rally party fell to third position in the second round of the French elections despite its outsized gains in the first round. However, EUR/USD is coming up against a significant trendline resistance of around 1.0970. EUR is feeling the drag from some unwinding of yen carry trades.

     

  • 18.07.2024 11:51
    EUR/USD: Nearly flat ahead of ECB policy decision – Scotiabank

    The Euro (EUR) has drifted a little lower over the session so far but losses are marginal ahead of the ECB policy decision, Scotiabank’s chief FX strategist Shaun Osborne notes.

    Lagarde to maintain a ‘data dependent’ approach

    “There is all but zero chance of the ECB cutting interest rates today. Swaps are pricing in steady policy and comments from top officials have suggested rate cuts will come through at a measured pace. President Lagarde seems likely to maintain a ‘data dependent’ approach to the policy outlook which may sound a little hawkish amid still relatively elevated service sector inflation pressures.”

    “Spot has edged a little lower from yesterday’s peak near 1.0950 but the minor decline is measured and may be taking the form of a small bull flag ahead of renewed gains (above 1.0935/40 this morning).”

    “Intraday, daily and weekly trend strength oscillators are aligned bullishly for the EUR which suggests limited downside movement potential for spot and ongoing risks for renewed push higher. Support is 1.0900/10. Resistance is 1.0980; above here targets EUR gains towards 1.10/1.11.”

  • 18.07.2024 08:47
    EUR/USD: To test the 1.0970-1.0980 resistance zone – UOB Group

    Rejuvenated momentum suggests further Euro (EUR) strength. EUR could test but is unlikely to break clearly above the significant resistance zone between 1.0970 and 1.0980, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

    Upwards momentum suggests further EUR strength

    24-HOUR VIEW: “Our view of EUR trading in a range yesterday was incorrect. Instead of trading in a range, EUR surged, reaching a high of 1.0947 before closing at 1.0937 (+0.37%). Not surprisingly, the sharp advance is overbought. However, as long as 1.0910 (with minor support at 1.0925) is not breached, EUR could test but is unlikely to break clearly above the significant resistance zone between 1.0970 and 1.0980.”

    1-3 WEEKS VIEW: “In our most recent narrative from two days ago (16 Jul, spot at 1.0895), we highlighted that ‘while there is still scope for EUR to rise further, upward momentum is slowing, and it remains to be seen if any further advance can reach 1.0940.’ We also highlighted that ‘a breach of 1.0850 (no change in ‘strong support’ level) would mean that the EUR strength from early this month (as annotated in the chart below) has run its course.’ Yesterday, EUR took off and broke above 1.0940, reaching a high of 1.0947. The rejuvenated upward momentum suggests further EUR strength, even though the 1.0970/1.0980 zone is expected to pose significant resistance. On the downside, the ‘strong support’ level has moved higher to 1.0885 from 1.0850.”

  • 18.07.2024 05:59
    EUR/USD consolidates around 1.0950 in countdown to ECB policy meeting
    • EUR/USD trades in a tight range around 1.0950 with ECB policy meeting in focus.
    • The ECB may not announce subsequent rate cuts.
    • Firm Fed rate-cut prospects have weighed on the US Dollar.

    EUR/USD turns sideways in Thursday’s European session after rallying to a fresh four-month high at around 1.0950 on Wednesday. The major currency pair is expected to remain quiet as investors shift to the sidelines ahead of the European Central Bank (ECB) policy meeting, which will be announced at 12:15 GMT.

    The ECB is expected to leave its key rates unchanged this time as officials have been refraining from committing a pre-defined rate-cut path amid concerns over sticky inflation in the service sector, which could reverse the disinflation process. Therefore, investors will look for cues about when the ECB cuts interest rates further.

    ECB President Christine Lagarde may not provide a specified rate-cut path and will emphasize the need for more data to gain confidence that the disinflation process will not stall before loosening policy further.

    The ECB delivered its first rate cut in June after maintaining a restrictive interest rate framework for two years to tame hot inflationary pressures driven by coronavirus-pandemic-led stimulus. The reasoning behind unwinding the tight policy stance was the firm confidence of officials that risks to inflation and the economy are finely balanced and price pressures will return to the desired rate of 2%.

    Currently, financial markets expect that the ECB will deliver two more rate cuts this year. The ECB is also expected to deliver its next rate-cut move in September.

    Daily Digest Marlet Movers: EUR/USD juggles while US Dollar remains on back foot

    • EUR/USD consolidates around 1.0950 ahead of the ECB policy outcome. The near-term outlook of the shared currency pair remains firm as the US Dollar (USD) remains vulnerable. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, seems fragile near a more than three-month low at 103.70.
    • The US Dollar could see more downside amid firm speculation that the Federal Reserve (Fed) will start reducing interest rates from the September meeting. Upbeat expectations for Fed rate cuts have been prompted by easing price pressures and cooling labor market conditions. June’s Consumer Price Index (CPI) report showed that annual headline and core inflationary pressures decelerated at a faster-than-expected pace. 
    • Fed’s Beige Book, released on Wednesday, showed that firms witnessed moderate growth and slower labor demand from late May through early July. Recent employment data also showed that the Unemployment Rate rose to 4.1%, the highest since December 2021.
    • Meanwhile, recent inflation figures have also boosted confidence of policymakers that inflation will return to the path of 2% target. On Wednesday, Fed Governor Christopher Waller communicated confidence over moderation in job market and inflation. When asked about rate cuts, Waller said, “I do believe we are getting closer to the time when a cut in the policy rate is warranted," Reuters reported.

    Technical Analysis: EUR/USD stays inside Wednesday’s trading range

    EUR/USD trades sideways around 1.0950, inside Wednesday’s trading range ahead of the ECB policy meeting. The major currency pair remains firm after a breakout of the Symmetrical Triangle formation on a daily timeframe. A breakout of the above-mentioned chart pattern results in wider ticks and heavy volume.

     The near-term outlook of the major currency pair is bullish as the 20-day Exponential Moving Average (EMA) near 1.0816 is sloping higher. 

    The 14-day Relative Strength Index (RSI) shifts into the bullish range of 60.00-80.00, suggesting a strong upside momentum.

    The shared currency pair is expected to extend its upside towards March 8 high near 1.0980. On the contrary, a downside move below the round-level support of 1.0800 could weaken the pair.

    Euro FAQs

    The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

    Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

    Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

     

  • 18.07.2024 05:17
    EUR/USD trades with bearish bias below 1.0950 ahead of ECB rate decision
    • EUR/USD weakens near 1.0935 in Thursday’s early European session. 
    • The ECB is anticipated to maintain rates steady at its July meeting on Thursday. 
    • Fed officials said the central bank is ‘getting closer’ to the first rate cut amid signs of cooling inflation. 

    The EUR/USD pair trades on a weaker note around 1.0935, snapping a two-day winning streak during the early European session on Thursday. The Greenback edges higher as traders turn cautious ahead of the European Central Bank's (ECB) monetary policy meeting later in the day. On the US docket, the weekly Initial Jobless Claims and Philly Fed Manufacturing Index will be released. 

    The ECB is expected to leave interest rates unchanged at its July meeting, awaiting further evidence of progress on inflation before adding to June’s initial cut. Market players see another rate cut in September, with futures markets showing nearly 80% odds of a rate cut. “President Lagarde’s remarks should leave the door open to a rate cut in September, albeit with softer signaling than that which preceded the June cut.” Said Bill Diviney, senior economist Eurozone at ABN Amro. 

    Across the pond, traders raise their bets for more aggressive rate cuts from the Fed amid signs that inflation is cooling toward the US central bank’s target. On Wednesday, Fed Governor Christopher Waller said that the central bank is ‘getting closer’ to an interest rate cut as inflation's improved trajectory and the labor market are in better balance. Meanwhile, Richmond Fed President Thomas noted that he is "very encouraged" that easing in inflation has begun to broaden and he would like to see it continue.” The dovish comments from Fed officials are likely to exert some selling pressure on the US Dollar (USD) and cap the pair’s downside. 

    Euro FAQs

    The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

    Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

    Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.



     

     

  • 17.07.2024 23:57
    EUR/USD crosses over 1.09 on Wednesday as Euro bulls gear up for ECB rate call
    • EUR/USD extended into bullish territory on Wednesday.
    • ECB rate call looms ahead, rate hold expected for now.
    • Markets have fully priced in a September rate cut from the Fed.

    EUR/USD rallied into fresh 18-week highs on Wednesday as market sentiment tilts firmly into the risk-on side ahead of the European Central Bank’s (ECB) latest rate call slated for Thursday. Broad-market risk appetite remains pinned into the ceiling as markets fully price in a rate cut from the Federal Reserve (Fed) on September 18.

    Forex Today: The ECB and Lagarde steal the show

    Fiber traders will be keeping eyes pinned to the ECB’s latest rate call slated for Thursday. The ECB is broadly expected to keep rates on hold for the time being as policymakers waver after an early quarter-point rate cut in June. With the ECB forecast to keep rates steady, traders will be looking for any shifts in policy speech talking points from ECB President Christine Lagarde later in the European market session.

    Read more:
    Fed's Barkin: Will debate at July meeting whether still appropriate to describe inflation as elevated
    Fed's Waller: Most likely direction for monetary policy is rate cuts

    Rate markets have fully priced in at least a quarter-point rate trim when the Federal Open Market Committee (FOMC) gathers for a rate call on September 18, and July’s month-end meeting is still expected to keep rates flat. According to the CME’s FedWatch Tool, 98% odds of a September rate cut are fully priced in, with rate traders seeing three cuts in 2024 compared to the Fed’s own modest projections of one or two.

    Despite a broad-market dog-pile into Fed rate cut bets, Fedspeak from key policymakers maintains a dark tint to otherwise sunny skies. Both Fed Governor Christopher Waller and Richmond Fed President Thomas Barkin noted that labor markets remain particularly robust despite easing inflation pressures.

    Euro PRICE This week

    The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the Australian Dollar.

      USD EUR GBP JPY CAD AUD NZD CHF
    USD   -0.29% -0.15% -1.56% 0.26% 0.80% 0.46% -1.35%
    EUR 0.29%   0.18% -1.07% 0.75% 1.13% 0.95% -0.87%
    GBP 0.15% -0.18%   -1.17% 0.57% 0.95% 0.72% -1.04%
    JPY 1.56% 1.07% 1.17%   1.84% 2.17% 2.01% 0.03%
    CAD -0.26% -0.75% -0.57% -1.84%   0.47% 0.20% -1.60%
    AUD -0.80% -1.13% -0.95% -2.17% -0.47%   -0.18% -1.97%
    NZD -0.46% -0.95% -0.72% -2.01% -0.20% 0.18%   -1.79%
    CHF 1.35% 0.87% 1.04% -0.03% 1.60% 1.97% 1.79%  

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

    EUR/USD technical outlook

    Fiber tilted into the top end on Wednesday, looking upwards through the midweek trading session and EUR/USD is on pace to chalk in a fourth straight week in the green, assuming buyers are able to maintain topside pressure.

    EUR/USD follows a near-term rising trendline from late June’s bottom bids near 1.0670, clipping into an 18-week peak just shy of 1.0950. An extension of the Fiber’s topside recovery has sent bids through the top end of a rough descending channel, and bidders are running out of footholds as short pressure gathers to drag the pair back down to the 200-day Exponential Moving Average (EMA) at 1.0800.

    EUR/USD hourly chart

    EUR/USD daily chart

    Euro FAQs

    The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

    Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

    Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

     

  • 17.07.2024 13:40
    EUR/USD: Rises through the low 1.09 area – Scotiabank

    The Euro (EUR) is firmer versus the US Dollar (USD), rising through the low 1.09 area that had capped gains in the past few weeks to reach its highest level since March, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

    EUR may extend gains to the 1.10/1.11 range

    “The EUR is firmer versus the USD, rising through the low 1.09 area that had capped gains in the past few weeks to reach its highest level since March. EUR/CAD has also broken through recent range peaks to near the mid-1.49s, the highest since late 2023. The EUR has largely ignored Trumps comments on tariffs that were specifically aimed at the EU.”

    “The charts reflect a positive technical undertone for the EUR. Spot gains have extended through recent highs to reach the best level since March. The EUR is making headway above major, long-term trend resistance and gains are supported by a bullish alignment of trend oscillators on the intraday, daily and weekly charts.”

    “That should mean minor EUR dips (to the high 1.08/low1.09 area) are well supported and these factors tilt risks towards EUR gains extending to the 1.10/1.11 range in the near-term.”

  • 17.07.2024 09:49
    EUR/USD jumps to near 1.0950 on firm Fed rate-cut expectations, ECB policy in focus
    • EUR/USD moves higher above 1.0900 as investors see a Fed rate cut in September as a done deal.
    • Better-than-expected US Retail Sales report fails to diminish Fed rate-cut prospects.
    • The ECB is expected to leave interest rates unchanged on Thursday.

    EUR/USD jumps above 1.0900 and reaches a new four-month high in Wednesday’s European session. The major currency pair extends gains after recovering its losses on Tuesday, driven by the better-than-expected United States (US) Retail Sales report for June. 

    Data showed on Tuesday that monthly Retail Sales remained unchanged, as expected, as lower receipts at auto showrooms were offset by robust demand for core goods. The Retail Sales Control Group, a key measure of consumer spending component of Gross Domestic Product (GDP) that excludes receipts from auto dealers, building-materials retailers, gas stations, office supply stores, mobile home dealers, and tobacco stores, rose at a stronger pace of 0.9% than the former release of 0.4%.

    The US Census Bureau also revised May’s Retail Sales reading to 0.3% from 0.1%, adding to economic strength. Though the Retail Sales report has emerged better than estimates, it is unable to weaken firm speculation that the Federal Reserve (Fed) will start reducing interest rates from the September meeting. 

    Traders see the gossip of rate cuts in September as a done deal due to cooling inflationary pressures and easing labor market strength. The recent consumer inflation report for June signaled that the disinflation process has resumed after a hiatus in the first quarter of the year.

    Also, recent commentary from Fed officials has indicated that their confidence in inflation declining to the bank’s target of 2% has improved. On Tuesday, Fed Governor Adriana Kugler signaled cautious optimism that inflation is on the path to return to the bank’s target of 2%. Kugler acknowledged progress in disinflation in all three categories: goods, services and now housing, Reuters reported.

    Daily digest market movers: EUR/USD rises further as US Dollar weakens

    • EUR/USD is expected to trade cautiously with a focus on the European Central Bank’s (ECB) monetary policy meeting, which is scheduled for Thursday. The ECB is expected to leave interest rates unchanged. Therefore, investors will pay close attention to commentary on the interest rate outlook to know when the ECB will cut interest rates again.
    • The ECB delivered its first rate cut in June after maintaining a restrictive interest rate framework for two years to tame hot inflationary pressures driven by coronavirus pandemic-led stimulus. ECB officials voted to roll back the tight policy stance after gaining confidence that inflation will return to the desired rate of 2%. However, policymakers expect price pressures to remain at their current levels for the entire year and return to the bank’s target next year.
    • Financial markets expect the ECB to deliver two more rate cuts this year. Meanwhile, investors’ sentiment in the Eurozone’s largest economy, Germany, has deteriorated due to weak demand from both domestic and overseas markets.
    • On Tuesday, a sharp decline in the German ZEW Survey – Economic Sentiment for July raised concerns over the economic outlook. The sentiment data, a key measure of the sentiment of institutional investors towards economic growth, declined at a robust pace to 41.8 from the consensus of 42.5 and May’s reading of 47.5.

    Technical Analysis: EUR/USD moves higher to 1.0950

    EUR/USD edges higher to near 1.0950. The major currency pair strengthens after a breakout of a Symmetrical Triangle formation on a daily timeframe. A breakout of the above-mentioned chart pattern results in wider ticks and heavy volume. The shared currency pair is expected to extend its upside towards the March 8 high near 1.0980.

    The major currency pair’s near-term outlook is bullish as the 20-day Exponential Moving Average (EMA) near 1.0816 is sloping higher. 

    The 14-day Relative Strength Index (RSI) shifts into the bullish range of 60.00-80.00, suggesting a strong upside momentum.

    Euro FAQs

    The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

    Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

    Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

     

  • 17.07.2024 08:21
    EUR/USD: A break above 1.0875/1.0915 Iikely to happen – UOB Group

    The Euro (EUR) is expected to trade in a 1.0875/1.0915 range. Upward momentum is slowing; it remains to be seen if EUR can rise further to 1.0940, UOB Group FX analysts Quek Ser Leang and Lee Sue Ann note.

    Above 1.0915 is set to reach 1.0940

    24-HOUR VIEW: “We expected EUR to trade in a range between 1.0875 and 1.0915 yesterday. EUR subsequently traded between 1.0870 and 1.0905, closing largely unchanged (1.0897, +0.03%). Momentum indicators are mostly flat, and we continue to expect EUR to trade in a 1.0875/1.0915 range.”

    1-3 WEEKS VIEW: “Our update from yesterday (16 Jul, spot at 1.0895) is still valid. As highlighted, while there is still scope for EUR to rise further, upward momentum is slowing, and it remains to be seen if any further advance can reach 1.0940. On the downside, a breach of 1.0850 (no change in ‘strong support’ level) would mean that the EUR strength from early this month has run its course.”

  • 17.07.2024 04:05
    EUR/USD Price Analysis: Appreciates to near 1.0900; next barrier around four-month highs
    • EUR/USD continues its upward momentum, supported by a bullish inclination observed in the daily chart analysis.
    • The pair may encounter resistance near a four-month high at 1.0922.
    • The lower boundary of the ascending channel around the 1.0870 level could serve as immediate support.

    EUR/USD advances for the second consecutive day, trading around 1.0900 during Wednesday's Asian session. The analysis of the daily chart shows a bullish trend, as the pair remains within an ascending channel.

    Moreover, the 14-day Relative Strength Index (RSI), a momentum indicator, is above the 50 level, further affirming the bullish sentiment for the EUR/USD pair. Continued upward momentum could strengthen the pair's bullish bias.

    The EUR/USD pair approaches potential resistance near a four-month high at 1.0922, observed on July 15. Further resistance is anticipated around the psychological level of 1.1000, followed by the upper boundary of the ascending channel near 1.1020.

    On the downside, initial support for the EUR/USD pair is expected near the lower boundary of the ascending channel around the 1.0870 level, which coincides with the nine-day Exponential Moving Average (EMA) at 1.0864.

    A breach below this level could intensify downward pressure on the pair, targeting support around the key level of 1.0670, potentially serving as a throwback support level.

    EUR/USD: Daily Chart

    Euro PRICE Today

    The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Swiss Franc.

      USD EUR GBP JPY CAD AUD NZD CHF
    USD   -0.06% -0.02% 0.00% -0.01% -0.07% -0.31% 0.00%
    EUR 0.06%   0.06% 0.07% 0.06% 0.02% -0.27% 0.08%
    GBP 0.02% -0.06%   0.00% 0.00% -0.06% -0.33% 0.03%
    JPY 0.00% -0.07% 0.00%   -0.02% -0.07% -0.34% 0.02%
    CAD 0.01% -0.06% 0.00% 0.02%   -0.07% -0.31% 0.03%
    AUD 0.07% -0.02% 0.06% 0.07% 0.07%   -0.25% 0.09%
    NZD 0.31% 0.27% 0.33% 0.34% 0.31% 0.25%   0.34%
    CHF -0.00% -0.08% -0.03% -0.02% -0.03% -0.09% -0.34%  

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

     

  • 16.07.2024 22:44
    EUR/USD pauses with ECB rate call around the corner
    • EUR/USD hung up on tense bidding near 1.0900.
    • Bullish momentum pulls up short as Fiber fails to crack into new technical highs.
    • ECB rate call in the barrel for Thursday after US data sparks renewed rate cut hopes.

    EUR/USD rotated around 1.0900 on Tuesday as markets grappled with September rate cut hopes getting pinned even further into the high end after US Retail Sales figures eased in June. Markets have fully priced in the start of a Federal Reserve (Fed) rate-cutting cycle in September, with up to three quarter-point cuts expected for the year. On the European side, the European Central Bank’s (ECB) latest rate call looms ahead on Thursday.

    Forex Today: UK, EMU inflation come to the fore along with US data

    In June, US Retail Sales remained flat at 0.0%, matching forecasts and dropping from the revised 0.3% in the previous month. This decline in Retail Sales added to the market's expectation of a rate cut at the upcoming Federal Open Market Committee (FOMC) meeting on September 18. The softening of US Retail Sales combined with a recent cooling in Consumer Price Index (CPI) data last week has increased the likelihood of a rate cut in September. According to the CME’s FedWatch Tool, the markets are now anticipating almost a 100% chance of at least a quarter-point rate reduction in September, with the possibility of up to three cuts by 2024.

    The ECB is broadly expected to keep rates on hold on Thursday as policymakers wait to see if data will improve following an initial quarter-point cut in June.

    Euro PRICE This week

    The table below shows the percentage change of Euro (EUR) against listed major currencies this week. Euro was the strongest against the New Zealand Dollar.

      USD EUR GBP JPY CAD AUD NZD CHF
    USD   0.07% 0.10% 0.13% 0.21% 0.76% 0.92% -0.08%
    EUR -0.07%   0.07% 0.24% 0.33% 0.73% 1.04% 0.04%
    GBP -0.10% -0.07%   0.27% 0.26% 0.66% 0.92% -0.03%
    JPY -0.13% -0.24% -0.27%   0.08% 0.42% 0.75% -0.40%
    CAD -0.21% -0.33% -0.26% -0.08%   0.49% 0.71% -0.29%
    AUD -0.76% -0.73% -0.66% -0.42% -0.49%   0.31% -0.69%
    NZD -0.92% -1.04% -0.92% -0.75% -0.71% -0.31%   -1.00%
    CHF 0.08% -0.04% 0.03% 0.40% 0.29% 0.69% 1.00%  

    The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent EUR (base)/USD (quote).

    EUR/USD technical outlook

    EUR/USD was unable to break decisively through the 1.0900 handle last week, and intraday bidding churns just south of the key technical barrier as markets await a meaningful push in either direction. The Fiber is holding close to a four-month high set at 1.0922 last Friday, and the key for buyers will be to keep EUR/USD buoyed above the 200-day Exponential Moving Average (EMA) at 1.0789.

    Fiber trading is hung up on the upper bound of a rough descending channel, and continued weakness could drag bulls back into the low end with the last swing low priced in just north of 1.0650.

    EUR/USD hourly chart

    EUR/USD daily chart

    Euro FAQs

    The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

    Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

    Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

     

  • 16.07.2024 13:44
    EUR/USD: Remains comfortable around the 1.09 area – Scotiabank

    Germany’s ZEW Survey for July reflected slightly weaker expectations among investors. The Euro (EUR) is trading around the 1.09 area, supported by the recent compression in short-term yield spreads, Scotiabank’s Chief FX Strategist Shaun Osborne notes.

    EUR may extend its gains to the mid-1.09s

    “Germany’s ZEW Survey for July reflected slightly weaker than expected expectations among investors (41) than markets expected (41.8). The index sat at 47.5 in June. This was the first decline in the index in a year. Investor concerns likely reflect the French election and the outlook for a relatively slow pace of ECB rate cuts moving forward.”

    “The Eurozone’s May Trade surplus posted a lower-than-expected surplus of EUR12.3bn in May. The data showed a surplus of EUR14.3bn with the US and a 6.8% rise in exports to the States in the year. These trends may come under more scrutiny in the months ahead. The EUR remains comfortable around the 1.09 area for now, supported by the recent compression in short-term yield spreads.”

    “Spot gains stalled above 1.09 yesterday but the EUR’s undertone remains constructive and bullish intraday, daily and weekly momentum readings suggest limited scope for losses for now and may drive gains to extend to the mid-1.09s. Look for spot to remain supported on minor dips through the upper 1.08s.”

  • 16.07.2024 09:39
    EUR/USD trades close to 1.0900 with ECB policy meeting in focus
    • EUR/USD consolidates near 1.0900 as investors shift focus to the US monthly Retail Sales and the ECB policy meeting.
    • The ECB is expected to leave interest rates unchanged.
    • Monthly US Retail Sales are estimated to have remained unchanged in June.

    EUR/USD hovers in a tight range near the round-level figure of 1.0900 in Tuesday’s European session as the upside move stalls with a focus on Thursday's European Central Bank (ECB) monetary policy meeting. The major currency pair is broadly firm as investors expect the ECB will not deliver subsequent rate cuts. 

    The ECB is expected to leave its key rates unchanged as policymakers worry that an aggressive policy-easing approach could uplift price pressures again. In the last monetary policy meeting, the ECB forecasted the price pressures to remain at their current levels for the entire year. 

    As the ECB is expected to keep interest rates at their current levels, investors will focus on cues about when the central bank will cut interest rates again. Currently, financial markets expect that the ECB will cut interest rates two times more this year. The ECB is expected to deliver rate cuts in the September and December meetings. 

    On the economic data front, a sharp decline in the German ZEW Survey – Economic Sentiment for July has raised concerns over the economic outlook. The sentiment data, a key measure of the sentiment of institutional investors towards economic growth, falls at a faster pace to 41.8 from the estimates of 42.5 and the former release of 47.5. On the contrary, the other component, known as the Current Situation, surprisingly improves to -68.9. Economists expected the sentiment data to have worsened further to -74.3 and the prior release of -73.8

    Daily digest market movers: EUR/USD turns sideways as USD Index steadies around 104.00

    • EUR/USD struggles to extend its upside above more than the three-month high of 1.0920. The upside move in the shared currency pair appears to have stalled for the time being as the US Dollar (USD) gains ground after Federal Reserve (Fed) Chair Jerome Powell’s speech at the Economic Club of Washington on Monday. The US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, manages to protect its immediate support of 104.00.
    • In his speech on Monday, Powell acknowledged that the inflation data in the second quarter has added to confidence that inflation will return sustainably to the bank’s target of 2%. However, Powell cited the need of more good data to gain greater confidence before cutting interest rates.
    • According to the CME FedWatch tool, 30-day Federal Fund futures pricing data shows that the central bank will cut interest rates twice this year and will start reducing them from the September meeting.
    • Recent Consumer Price Index (CPI) data for June showed that headline and core inflation decelerated at a faster pace than expected on a monthly and annual basis. The monthly headline CPI deflated for the first time in more than four years. 
    • In Tuesday’s session, the major trigger for the US Dollar will be the United States (US) Retail Sales data for June, which will be published at 12:30 GMT. The Retail Sales data, a key measure of consumer spending that drives consumer inflation, is estimated to have remained unchanged month-on-month after barely growing in May.

    Technical Analysis: EUR/USD holds symmetrical triangle breakout

    EUR/USD tests the breakout region of the Symmetrical Triangle formation on a daily timeframe near 1.0880. A breakout of the above-mentioned chart pattern results in wider ticks and heavy volume. The near-term outlook of the major currency pair is bullish as the 20-day Exponential Moving Average (EMA) near 1.0816 is sloping higher. 

    The 14-day Relative Strength Index (RSI) shifts into the bullish range of 60.00-80.00, suggesting a strong upside momentum.

    Euro FAQs

    The Euro is the currency for the 20 European Union countries that belong to the Eurozone. It is the second most heavily traded currency in the world behind the US Dollar. In 2022, it accounted for 31% of all foreign exchange transactions, with an average daily turnover of over $2.2 trillion a day. EUR/USD is the most heavily traded currency pair in the world, accounting for an estimated 30% off all transactions, followed by EUR/JPY (4%), EUR/GBP (3%) and EUR/AUD (2%).

    The European Central Bank (ECB) in Frankfurt, Germany, is the reserve bank for the Eurozone. The ECB sets interest rates and manages monetary policy. The ECB’s primary mandate is to maintain price stability, which means either controlling inflation or stimulating growth. Its primary tool is the raising or lowering of interest rates. Relatively high interest rates – or the expectation of higher rates – will usually benefit the Euro and vice versa. The ECB Governing Council makes monetary policy decisions at meetings held eight times a year. Decisions are made by heads of the Eurozone national banks and six permanent members, including the President of the ECB, Christine Lagarde.

    Eurozone inflation data, measured by the Harmonized Index of Consumer Prices (HICP), is an important econometric for the Euro. If inflation rises more than expected, especially if above the ECB’s 2% target, it obliges the ECB to raise interest rates to bring it back under control. Relatively high interest rates compared to its counterparts will usually benefit the Euro, as it makes the region more attractive as a place for global investors to park their money.

    Data releases gauge the health of the economy and can impact on the Euro. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the single currency. A strong economy is good for the Euro. Not only does it attract more foreign investment but it may encourage the ECB to put up interest rates, which will directly strengthen the Euro. Otherwise, if economic data is weak, the Euro is likely to fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are especially significant, as they account for 75% of the Eurozone’s economy.

    Another significant data release for the Euro is the Trade Balance. This indicator measures the difference between what a country earns from its exports and what it spends on imports over a given period. If a country produces highly sought after exports then its currency will gain in value purely from the extra demand created from foreign buyers seeking to purchase these goods. Therefore, a positive net Trade Balance strengthens a currency and vice versa for a negative balance.

     

  • 16.07.2024 08:32
    EUR/USD: Trades North towards 1.0915 – UOB Group

    The Euro (EUR) is expected to trade in a range, likely between 1.0875 and 1.0915. Upward momentum is slowing; it remains to be seen if EUR can rise further to 1.0940, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.

    Next resistance above 1.0915 is at 1.0940

    24-HOUR VIEW: “Yesterday, we expected EUR to trade in a range between 1.0855 and 1.0905. Our expectations were incorrect, as it rose to 1.0922 before pulling back to close at 1.0894 (-0.11%). The advance did not result in any clear increase in momentum. Today, we continue to expect EUR to trade in a range, probably between 1.0875 and 1.0915.”

    1-3 WEEKS VIEW: “We highlighted last Friday (12 Jul, spot at 1.0865) that EUR ‘is expected to continue to rise.’ We also highlighted that ‘severely overbought conditions suggest it might take a couple of days before 1.0915 comes into view.’ Yesterday, EUR broke above 1.0915, reaching a high of 1.0922. EUR pulled back from the high, closing at 1.0894 (-0.11%). While there is still scope for EUR to rise further, upward momentum is slowing, and it remains to be seen if any further advance can reach 1.0940. On the downside, a breach of 1.0850 (‘strong support’ level previously at 1.0825) would mean that the EUR strength from early this month has run its course.”

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