EURUSD could fall further due to dovish mood surrounding the ECB.
EURUSD remains near 1.0850 during the Asian hours on Friday, following a drop in the previous session that could be ascribed to the European Central Bank’s (ECB) interest rate decision. Furthermore, better-than-expected US GDP figures helped the US Dollar (USD) mark profits on Thursday, which works as a headwind. regarding the EURUSD pair.
Market participants expect the ECB to decrease interest rates by 50 basis points in June.
For the third day in a row, the European Central Bank (ECB) left interest rates unchanged. In her monetary policy statement, ECB President Christine Lagarde hinted at the potential of a rate drop this summer. Market participants predict an initial 50 basis point drop from the ECB by June. Rate swaps now anticipate a total of 140 basis points of rate decreases from the ECB by the end of 2024.
US Treasury Secretary Janet Yellen stressed that the most recent GDP figure poses no threat to the US economy’s’soft landing’ scenario.
The US Dollar Index (DXY) may look to extend current gains, buoyed by stronger-than-expected US Gross Domestic Product (GDP) numbers. The Q4 GDP data showed a value of 3.3%, up from the previous figure of 4.9% and above the market consensus of 2.0%.
The US Treasury Secretary, Janet Louise Yellen, has emphasized that the robust Q4 GDP report is the consequence of energetic and healthy spending, combined with productivity gains. She emphasizes that the GDP data does not pose any danger to the possibility of a’soft landing’ for the US economy. Furthermore, on Friday, the Personal Consumption Expenditures (PCE) Price Index data is likely to shed light on the monthly increases in both Personal Spending and Personal Income, impacting market mood even more.
