Euro remains flat above 1.0845, with the overall bearish trend continuing.
The Euro (EUR) is trading in a narrow range. Failing to move away from its one month lows at 1.0845 during Friday’s European trading session. The robust US macroeconomic data released this week caused. Investors to reconsider their interest rate expectations, boosting the US Dollar overall.
The good US data observed this week has tempered expectations for Fed cutbacks, supporting the US dollar.
Data released on Thursday revealed that the US first unemployment claims decreased versus estimates in the week of January 12. These numbers support the picture of a resilient US economy painted by strong Retail Sales earlier this week. Implying that the Federal Reserve (Fed) still has some work to do to bring inflation back to the target level.
ECB President Lagarde rules out rate cuts before next summer, providing some assistance to the Euro.
Christine Lagarde, President of the European Central Bank (ECB), will speak for the final time today before the two-week blackout prior of the monetary policy meeting in January.
In the United States, the Michigan Consumer Sentiment Index and the University of Michigan Consumer Inflation Expectations will draw attention. Later, San Francisco Fed President Mary Daly may provide additional information about the bank’s monetary policy forecast.
Daily market movers: Euro lingers near one-month lows, hurt by USD strength.
The euro is hesitating above the 1.0845 support level as the US dollar gains and investors reduce their expectations of Fed cuts.
US jobless claims fell to 187K in the week ending January 12, down from 203K the previous week and below estimates of 207K.
US unemployment rates confirm the durability of the US economy, casting further doubt on investors’ hopes for Fed cutbacks in March.
The ECB’s monetary policy reports, released on Thursday, indicate policymakers’ belief that inflation is receding; yet, rate reduction remain off the table.
ECB President Lagarde said at the Davos World Economic Summit that the bank will not decrease interest rates until next summer.
Atlanta Fed President Raphael Bostic does not see any interest rate decreases imminent. Until the third quarter.
The CME Group FedWatch Tool now predicts a 55% chance of rate decreases in March, down from 75% last week.
