The euro begins the session with moderate support as the renewed rise in oil prices increases inflation risks across the euro area. This is particularly important for the ECB following its June rate increase. The meeting minutes showed that policymakers expected inflation to remain above target even after further policy tightening. This backdrop keeps the possibility of additional action open and supports demand for the single currency.
At the same time, economic conditions across the region remain uneven. A stronger estimate for French growth has partly eased concerns about business activity. However, higher energy prices may weaken industrial output and household spending. The euro is therefore supported not by a broad improvement in economic data, but by the likelihood that persistent inflation will limit the ECB’s ability to pause.
The US dollar remains steady ahead of the US inflation report, which may influence Federal Reserve interest rate expectations. Stronger-than-expected data could restore the dollar’s advantage, but investors are likely to remain cautious until the release. If the report does not increase expectations of an imminent Federal Reserve rate hike, stronger expectations of further ECB action may support a rise in EURUSD.
Trading idea: BUY 1.13950, SL 1.13650, TP 1.14850
At the same time, economic conditions across the region remain uneven. A stronger estimate for French growth has partly eased concerns about business activity. However, higher energy prices may weaken industrial output and household spending. The euro is therefore supported not by a broad improvement in economic data, but by the likelihood that persistent inflation will limit the ECB’s ability to pause.
The US dollar remains steady ahead of the US inflation report, which may influence Federal Reserve interest rate expectations. Stronger-than-expected data could restore the dollar’s advantage, but investors are likely to remain cautious until the release. If the report does not increase expectations of an imminent Federal Reserve rate hike, stronger expectations of further ECB action may support a rise in EURUSD.
Trading idea: BUY 1.13950, SL 1.13650, TP 1.14850
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More analytical information and promotions on FreshForex website cutt.ly/LrP6j9qD
Clause de non-responsabilité
Les informations et publications ne sont pas destinées à être, et ne constituent pas, des conseils ou recommandations financiers, d'investissement, de trading ou autres fournis ou approuvés par TradingView. Pour en savoir plus, consultez les Conditions d'utilisation.