EURUSD saw some follow-through purchasing as the US dollar fell somewhat.

The EURUSD pair builds on the previous day’s solid recovery from sub-1.0800 levels, or a one-week low, and finds some traction on Thursday. The impetus picks up over the first part of the European session, lifting spot prices above the mid-1.0800s, but lacks follow-through. The shared currency was supported by somewhat better inflation statistics from Spain and France, which, together with a little US dollar (USD) weakness, turned These turned out to be important variables acting as a tailwind for the currency pair.

Reduced betting on aggressive ECB policy easing underpins and supports the Euro.

The reduced bets on the European Central Bank’s (ECB) quick interest rate cuts provide additional support for the EURUSD pair. However, traders appear hesitant to put aggressive wagers ahead of more inflation data from Germany and the United States (US), which could affect future policy choices by the European Central Bank (ECB) and the Federal Reserve (Fed). This, in turn, will help determine the next leg of the EURUSD pair’s directional move ahead of the ECB meeting next Thursday.

Daily Market digest: EURUSD fades warmer French and Spanish CPI-inspired intraday rise.

The National Institute of Statistics and Economic Studies revealed that the Consumer Price Index (CPI)
In February, the French economy grew by 2.9% year on year, compared to 3.4% the previous month and 3% projected.
Meanwhile, the headline CPI in Spain fell from 3.4% in January to 2.8% year on year during the reported month, but it remained somewhat higher than consensus predictions of 2.7%.
Retail sales in Germany declined 0.4% month on month in January, falling short of estimates of a 0.5% growth and adding to fears about the Eurozone’s largest economy’s bleak outlook.
Investors, on the other hand, were cautious ahead of critical inflation data from the Eurozone and the United States on Thursday, which could limit the EUR/USD pair’s further appreciation.
ECB Governing Council member Peter Kazimir stated on Wednesday that he would prefer the central
The bank plans to begin decreasing rates in June, followed by a smooth and steady cycle of policy easing.
ECB Vice President Luis de Guindos stated that recent inflation data has been quite promising, but the central bank must ensure that prices will rise to the 2% target before decreasing rates.
Money markets are now pricing in approximately 90 basis points (bps) of ECB rate cuts this year, down from nearly 150 bps a month ago, which is viewed as a tailwind for the EURUSD.

Traders are now expecting further inflation data from Germany and the United States to provide a boost.

The second estimate of the US GDP print indicated on Wednesday that the world’s largest economy grew at a 3.2% annualized rate in the fourth quarter, compared to the prior reading of a 3.3% increase.
The
Data indicated that the US economy is in strong shape, which, together with statements from many Federal Reserve officials, maintained the higher-for-longer interest rate narrative.
New York Fed President John Williams stated that the central bank will begin decreasing rates this year, depending on how the data comes in, while there is still a long way to go before reaching the 2% inflation target.
Atlanta Fed President Raphael Bostic emphasized that the US central bank has not declared victory against inflation and that he is comfortable urging patience when it comes to relaxing policy.
Furthermore, Boston Fed President Susan Collins emphasized that it will be prudent to begin relaxing policy later this year, but the route to returning inflation to its 2% target It will most likely be bumpy.
However, the US Dollar is struggling to attract buyers as traders turn to the US Personal Consumption Expenditures (PCE) Price Index for clues regarding the Fed’s rate-cutting path and some substantial stimulus.
Thursday’s economic calendar also includes flash CPI estimates from Germany, France, and Spain, as well as US macro data such as weekly initial jobless claims, the Chicago PMI, and pending home sales.
The focus will next shift to Eurozone consumer inflation data on Friday, which may impact expectations about the ECB’s future policy decisions and add volatility to the currency pair.