- Profits from the euro, because Sino-Us’s commercial talks relieve tensions, and EBC officials signal confined rates.
- Kazimir and Schnabel EBC move into extended soothing expectations.
- NY Fed shows that inflation expectations have dropped, but household prospects have deteriorated.
EUR/USD was promoted on Monday during the North American session, guided by hopeful market sentiments driven at a high level of tariff talks in the US in Great Britain. This, along with the perceived “Jastrzębie” cut by the European Central Bank (EBC), pushed a pair above 1.1400, bringing an augment of over 0.25%.
The market mood has changed positively in Sino-Us. Meanwhile, the Wall Street Journal revealed that Trump awarded the American Secretary of the Bessent Treasury some flexibility in increasing export control in China. Greenback was strengthened by the headline, but it turned negatively on the day when investors looking for risk led us to higher action.
A compact economic document in the US contained the edition of New York Fed Survey of Consumers Oversations (SCE), which showed that inflational expectations for one, three and five years of five years dropped. Although this is positive, the survey showed that the perception of their households of their current and future financial situation deteriorated.
In the euro area (EU), the document is scarce, but ECB officials chaired by the head of the Bundesbank Joachim Nagel, EBC Isabel Schnabel and Kazimir. Nagel said that the ECB should be pliant in terms of rates, and Schnabel noticed that EBC should not expect indefinite disconnection from the FED. Kazimir became Jastrzębia, saying that the central bank is almost or at the end of the soft cycle.
Euro price this week
The table below shows the percentage change in the euro (EUR) compared to the main currencies this week. The euro was the strongest in relation to the American dollar.
| USD | EUR | GBP | JPy | BOOR | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.26% | -0.24% | -0.22% | -0.08% | -0.37% | -0.58% | -0.03% | |
| EUR | 0.26% | 0.00% | 0.03% | 0.18% | -0.07% | -0.33% | 0.22% | |
| GBP | 0.24% | -0.01% | 0.12% | 0.17% | -0.08% | -0.34% | 0.21% | |
| JPy | 0.22% | -0.03% | -0.12% | 0.13% | -0.21% | -0.42% | 0.05% | |
| BOOR | 0.08% | -0.18% | -0.17% | -0.13% | -0.31% | -0.50% | 0.04% | |
| Aud | 0.37% | 0.07% | 0.08% | 0.21% | 0.31% | -0.25% | 0.29% | |
| NZD | 0.58% | 0.33% | 0.34% | 0.42% | 0.50% | 0.25% | 0.54% | |
| CHF | 0.03% | -0.22% | -0.21% | -0.05% | -0.04% | -0.29% | -0.54% |
The heat map shows percentage changes in the main currencies towards each other. The basic currency is collected from the left, and the quote currency is collected from the upper order. For example, if you choose the euro on the left column and go along the horizontal line to the American dollar, the percentage shift displayed in the field will represent the EUR (base)/USD (quote).
Daily Digest Market Movers: EUR/USD progress at Hawkish Tilt EBC
- New York Fed Sceen revealed that inflation expectations for one year dropped from 3.6% to 3.2%, while for a three -year horizon they fell from 3.2% to 3%. Finally, for five years it was 2.6%, compared to 2.7% in the previous study.
- The Solid Solid Solid Work report last Friday, along with expectations regarding the augment in inflation data on Wednesday, suggests that the economy remains solid, justifying the federal reserve maintaining unchanged rates.
- According to Bloomberg, EBC officials expect rates to be stopped in July. “Some officials see a reduction in the cost of the loan, because maybe already completed, while others still support another move – probably in September, according to people.”
- Financial market players do not expect ECB to reduce the rate of deposit interference by 25 base points (BPS) at the July monetary policy meeting.
Euro technical perspectives: EUR/USD recovers 1.1400 during a muted session
EUR/USD uptrend remains intact because the pair has reached another series of higher and higher heights. In addition, the relative force indicator (RSI) is stubborn. However, the couple must print the daily nearly 1.14 to challenge higher prices. In this result, the next pair resistance would be a sign of 1.1450, followed by 1.15. Then Figure 1.16 lies.
And vice versa, if EUR/USD drops below 1.14, the next level of support is the two -day lowest levels in June 1.1344. The violation of the latter reveals the 20-day straight movable average (SMA) to 1.1318, followed by 1.13 and 50-day SMA to 1.1268.
FAQ euro
The euro is the currency of 19 European Union countries, which belong to the euro area. This is the second most frequently commercial currency in the world behind the American dollar. In 2022, it accounted for 31% of all currency transactions, with an average daily turnover of over USD 2.2 trillion per day. EUR/USD is the most rotating currency pair in the world, which is about a 30%discount on all transactions, followed by EUR/JPy (4%), EUR/GBP (3%) and EUR/AUD (2%).
The European Central Bank (EBC) in Frankfurt, Germany is a bank reserve bank. EBC sets interest rates and manages monetary policy. The main mandate of the ECB is to maintain price stability, which means either controlling inflation or stimulating growth. Its main tool is to augment or reduce interest rates. Relatively high interest rates – or waiting for higher feet – will usually bring the benefits of the euro and vice versa. The ECB Managing Council makes decisions regarding monetary policy at meetings taking place eight times a year. Decisions are made by the heads of national banks of the euro area and six indefinite members, including the President of EBC, Christine Lagarde.
Data on inflation in the euro area, measured by a harmonized consumer price indicator (HICP), are an critical econometric for the euro. If inflation increases more than expected, especially if it is above the target 2% EBC, it obliges EBC to raise interest rates to restore it to control. Relatively high interest rates compared to its counterparts will usually benefit the euro, because it makes the region more attractive as a place for global investors to park their money.
The data release the health of the economy and can affect the euro. Indicators such as GDP, PMI production and services, surveys regarding employment and consumer moods can affect the direction of the common currency. A mighty economy is good for the euro. It not only attracts more foreign investment, but can encourage EBC to set interest rates, which will directly strengthen the euro. Otherwise, if economic data is feeble, the euro will probably fall. Economic data for the four largest economies in the euro area (Germany, France, Italy and Spain) are particularly significant because they constitute 75% of the euro area economy.
Another significant issue of data for the euro is the commercial balance. This indicator measures the difference between what the country earns on exports and what spends on imports in a given period. If the country generates a highly sought after export, its currency will gain value only from additional demand created by foreign buyers trying to buy these goods. Therefore, a positive net trade balance strengthens currency and vice versa for a negative balance.
