EURUSD consolidates around 1.0770 as the US Dollar remains stable in the wake of US statistics.

In Monday’s European session, the EURUSD traded sideways at 1.0770. This week’s Eurozone economic calendar lacks tier-1 data, causing the key currency pair to consolidate.

ECB Stournaras expects the central bank to reduce interest rates three times this year.

The European Central Bank (ECB) is largely expected to pivot to policy normalization at its June meeting. As a result, speculation regarding the ECB’s stance on interest rates. In the second half of the year will influence the Euro’s movement.

ECB officials are divided on Extending the interest rate-cutting cycle beyond the June meeting. Some policymakers worry that prolonging rate cuts after the July meeting could revive price pressures. In an interview with a Greek media outlet, ECB policymaker and Bank of Greece Governor Yannis Stournaras predicted three rate decreases for the year as a whole. He believes a rate drop in July is probable. And that the Eurozone’s economic recovery in the first quarter of the year makes three cuts more plausible than four. The eurozone economy grew by 0.3% in January-March, exceeding estimates of a 0.1% increase.

Daily Market movers: EURUSD consolidates as US Dollar stabilizes.

EURUSD trades flat around 1.0770 as the US Dollar remains relatively stable in The United States labor market and the ISM Services Purchasing Managers Index (PMI) data for April were issued on Friday. The US Nonfarm Payrolls (NFP) report revealed that fresh labor additions were much fewer than expected, and wage growth slowed on both a monthly and annual basis.

Weak US job market data and a low ISM Services PMI cloud the US economic picture.

The US Dollar Index (DXY) plummeted to 104.60, a nearly four-week low, as labor market conditions eased. However, the USD index swiftly recovered. After the ISM Services PMI revealed that businesses are paying higher input prices.
In April, the ISM Services Prices Paid index increased to 59.4 from 53.4, indicating a stubborn inflation forecast. The inputs in the service sector are primarily the wages given to employees. Which frequently leads to increased Consumer spending eventually drives price pressures. Though the ISM Services PMI, which measures the service sector that accounts for two-thirds of the economy, dips below 50.0 to 49.4, it is the lowest level since December 2022.
The dismal ISM Service PMI and easing labor market conditions have sparked concerns about the US economy’s outlook. These developments have fueled expectations that the Fed may reduce interest rates at its September meeting. According to the CME FedWatch tool, traders expect interest rates to be lower in September than they are now.
Contrary to market expectations, Fed Governor Michelle Bowman stated on Friday. That she would be inclined to hike interest rates further if progress toward lowering inflation to 2% stalled or reversed according to Reuters. However, she is confidence that inflation will drop even if interest rates remain at current levels confidence that inflation will drop even if interest rates remain at current levels.