EURUSD remains at its crucial support level of 1.1000 as the Fed looks ready to decrease interest rates in September.
During Thursday’s European session, the EURUSD pair traded in a tight range above the psychological support of 1.1000. The major currency pair risks mild profit-taking after reaching a new more than seven-month high of 1.1050.
However, the major’s near-term outlook remains robust, as the Federal Reserve (Fed) is widely expected to pull back its restrictive monetary policy stance in September. Which it has maintained since March 2022.
Moderate growth in the US CPI in July increased confidence that inflation will remain on pace to meet the bank’s objective of 2%.
The United States (US) Consumer Price Index (CPI) data for July, issued on Wednesday. Bolstered investors’ confidence that the Fed will lower interest rates in September. As it showed that price pressures are on pace to return to the intended rate of 2%. The annual core CPI. Which excludes volatile food and energy costs and is one of the most closely watched inflation indicators by Fed policymakers, increased by 3.2% as expected, compared to 3.3% in the previous release. In the same time, the headline CPI fell to 2.9% from 3% expected and released previously.
As Fed rate reduction have taken center stage, market sentiment has shifted favorably toward risky assets. S&P 500 Futures. Which it has maintained since March 2022.
The United States (US) Consumer Price Index (CPI) data for July, issued on Wednesday. Bolstered investors’ confidence that the Fed will lower interest rates in September. As it showed that price pressures are on pace to return to the intended rate of 2%. The annual core CPI, which excludes volatile food and energy costs and is one of the most closely watched inflation indicators by Fed policymakers. Increased by 3.2% as expected, compared to 3.3% in the previous release. In the same time, the headline CPI fell to 2.9% from 3% expected and released previously.
As Fed rate reduction have taken center stage, market sentiment has shifted favorably toward risky assets. S&P 500 Futures have made decent gains in the European session.
The European Central Bank is anticipated to avoid significant interest rate cuts.
The US Dollar Index (DXY), which analyzes the US dollar’s value against six major currencies, is just above the weekly low of 102.27.
Meanwhile, investors are waiting for the US Retail Sales data for July. Which will be released at 12:30 GMT. Retail Sales data, a crucial measure of consumer spending, is expected to have increased by 0.3% after remaining unchanged in June.
On the Eurozone front, the Euro (EURUSD) remains relatively solid as investors anticipate that the European Central Bank (ECB) will continue the policy-easing cycle with a measured approach. To avoid the risk of reaccelerating price pressures, ECB officials have refrained from committing to a predetermined interest-rate lowering path.
