EURUSD remains below 1.0700 as investors await US CPI.
During the early Asian trading hours on Monday, the EURUSD pair begins the week on a high note. The pair’s resurgence is being aided by the US Dollar’s (USD) consolidation mindset. The pair has recovered from last week’s low of 1.0656 and is still trading below the 1.0700 level. The main pair is presently trading near 1.0690, up 0.04% on the day.
Fed Chair Powell stated that the central bank will not hesitate to tighten policy further if necessary.
The Consumer Sentiment Index at the University of Michigan fell from 60.4 in November to 63.7 in October. 12-month inflation forecasts in the United States increased to 4.4% from 4.2%, while 5-year estimates increased to 3.2% from 3.0%. The significant event will be the release of the October CPI report. If the report indicates a higher-than-expected level, the Fed may boost interest rates again in December. Last week, Fed Chair Jerome Powell stated that if it becomes necessary to tighten policy further, the central bank will not hesitate to do so.
European Commission will announce Economic Growth Forecasts, with downward adjustments to 2024 growth predicted.
The European Commission, on the other hand, will announce Economic Growth Forecasts later on Monday, with downward adjustments. Growth is predicted until 2024. The preliminary Eurozone GDP for the third quarter (Q3) will be released. The quarterly figures are expected to fall by 0.1%, while the annual total is expected to rise by 0.1%. Aside from that, other ECB speakers, including Lagarde, De Guindos, Lane, and Villeroy, will almost certainly reaffirm that any talk of rate cuts is premature.
According to the International Monetary Fund, fast wage growth in the eurozone may keep inflation elevated for longer, and the European Central Bank should keep interest rates at or near record highs throughout next year to alleviate price pressures. However, the market expects a rate drop, maybe as early as April, with a total of 90 basis points (bps) factored in the end of next year.
This week’s focus will be on the US Consumer Price Index (CPI) and the Eurozone Gross Domestic Product (GDP).
