EURUSD rebounded from five month lows Despite the Fed’s aggressive monetary policy outlook.
EURUSD recovers from a five month low of 1.0622 set last Friday. Staying around 1.0660 during early European trading hours on Monday. The EURUSD pair fell as the European Central Bank (ECB) and the Federal Reserve (Fed) disclosed differing monetary policy outlooks.
Investors are anticipating the publication of Eurozone Industrial Production statistics for March on Monday. Furthermore, the investors’ emphasis will move to US retail sales statistics. Which are scheduled to be announced later today.
ECB member Gediminas Simkus predicts at least three rate decreases in 2024, with a likelihood of higher than 50%.
The ECB indicated that if underlying inflation continues to slow as expected. Policy rates could be reduced in June. Meanwhile, the Federal Reserve (Fed) appears to be reconsidering its monetary easing policies in response to persistent US inflation. And strong macroeconomic indicators. According to data released on Thursday, core producer inflation in the United States (US) rose year on year in March, exceeding forecasts.
As tensions in the Middle East rise, EURUSD traders may seek safety in the US Dollar, a safe haven.
Traders take a cautious attitude in the face of rising geopolitical tensions. Which may lead them to seek refuge in the safe haven US Dollar (USD). Thus placing pressure on the EURUSD pair. There is the risk that Israel will retaliate to Iran’s attack. On Saturday, Iran launched. According to Reuters, Israel successfully intercepted most of the incoming drones and missiles targeting military installations. On Monday, Gediminas Šimkus, a member of the European Central Bank (ECB) Governing Council stated. That there is a greater than 50% likelihood of more than three rate cuts occurring this year. He also mentioned that geopolitical events, such as an escalation of the Israel Iran conflict,
