EURUSD falls below 1.0900 as monthly US retail sales stay flat in June, as forecast.

EURUSD has fallen from more than a three-month high of 1.0920 in Tuesday’s American session. The upward movement in the shared currency pair looks to have paused for the time being as the US Dollar (USD) gains strength. The US Dollar Index (DXY), which tracks the Greenback’s value versus six major currencies, maintains its immediate support level of 104.00.

The US dollar recovers after the US retail sales report for June revealed that sales Retail sales remained flat in June, as expected, month on month. The economy expanded by 0.3% in May, up from 0.1% the previous month. Retail Sales data is an important indicator of consumer spending, which fuels consumer inflation. A flat performance is incapable of increasing inflationary pressures.

Fed Chairman Powell acknowledged that inflation is moving closer to the bank’s 2% target.

Fears about pricing pressures being tenacious have subsided. In his speech to the Economic Club of Washington on Monday, Federal Reserve (Fed) Chair Jerome Powell admitted that the second-quarter inflation data has increased confidence that inflation will return to the bank’s target of 2% on a sustained basis. Powell did, however, mention the need for additional strong data to develop confidence before decreasing interest rates.

According to the CME FedWatch service, 30-day federal funds Futures pricing statistics imply that the central bank will decrease interest rates twice this year, beginning with the September meeting.

Recent Consumer Price Index (CPI) statistics for June indicated that headline and core inflation fell faster than predicted on a monthly and annual basis. The monthly headline CPI fell for the first time in over four years.

Daily Market movers: EURUSD edges lower as US Dollar recovers.

EURUSD falls below the round-level support of 1.0900 as the upward trend pauses due to uncertainties surrounding Thursday’s European Central Bank (ECB) monetary policy meeting. The key currency pair is largely strong as investors expect the ECB to avoid further rate cuts.
The ECB expected to exit. Its key interest rates remain steady, as officials are concerned that aggressive policy easing could exacerbate price pressures. At the most recent monetary policy meeting, the ECB anticipated that price pressures would remain at current levels for the rest of the year. As the ECB is anticipated to keep interest rates unchanged, investors will look for clues as to when the central bank will decrease interest rates again. Currently, financial markets expect the ECB to decrease interest rates twice more this year. The ECB is anticipated to lower rates in September and December meetings.
On the economic data front, the German ZEW Survey – Economic Sentiment for July fell sharply, raising concerns about the economy’s outlook. The sentiment data is a The main index of institutional investors’ sentiment for economic growth falls quicker than expected to 41.8, down from 42.5 and 47.5 in the previous report. In contrast, the other component, known as the Current Situation, unexpectedly improves to -68.9. Economists predicted sentiment data to have worsened further to -74.3 from the previous report of -73.8.