- The euro hit tough despite the stable data of EU inflation, because geopolitical tensions escalate the American dollar.
- Israel’s strike in Iran causes that safely-haven flows into the dollar; EUR/USD drops from 1.16 to 1.1488 endowed.
- Tehran cancels nuclear conversations; Risk sentiments are deteriorating, overshadowing the supple US inflation.
- Industrial production contracts in the euro area; German CPI at a constant level of 2.1%, but French and Spanish inflation will slip below the ECB target.
EUR/USD ends with a four -day winning run, prints losses on Friday, because the appetite at risk goes after Israel began an attack on Iran, increasing the secure charm of the US dollar (USD). At the time of writing, the pair trad around 1.1530, which is a decrease of 0.36%.
The sentiment moved sourly after Breaking News revealed the attack of Israel, which attacked Iranian militia officials, nuclear installations and facilities. Therefore, Iran took revenge, sending over a hundred drones and canceled the sixth round of nuclear negotiations, according to Times Tehran.
On the headers, the American dollar appreciated most of the G7 currencies, with the euro almost not damaged, because the pair reached 1.1488, which accounts for almost 0.80% during the day.
According to Reuters, US President Donald Trump said it was not clear whether Iran still had a nuclear program. He said: “I tried to save Iranian humiliation and death,” adding that he is not worried about the regional breakthrough.
Recently, data from the United States (USA) revealed that consumers are becoming more positive about the economy, according to the University of Michigan (UOM). When it comes to inflation expectations, Americans still see prices above the target 2% of the federal reserve, despite the data of inflation published during the week, increasing the plants that the Fed may reduce rates in 2025.
In the euro area (EU), German inflation data may remain unchanged at the level of 2.1% as expected. Inflation in France and Spain remains below the target European Central Bank (EBC). Industrial production throughout the block fell in April, after a growing by 2.4% in March, and reached -2.4% y / y, which is below forecasts for a spas of 1.7%.
Daily Digest Market Movers: EUR/USD dives at the risk of mood, increasing the dollar
- Despite the withdrawal, EUR/USD seems to be ready to resume their growth up, because EBC officials have become slightly hawk, and the news that US-China talks can ensure relief to investors. Nevertheless, the escalation of the Israeli-Iran war exerts pressure on couples.
- The University of Michigan consumer mood indicator increased to 60.5 from 52.2 in June, reflecting the growing optimism among households. Inflation expectations have decreased, and the annual forecasts dropped from 6.6% to 5.1%, and the five -year forecast dropped from 4.2% to 4.1%.
- Next week, it is expected that the US Federal Reserve (FED) will maintain interest rates unchanged at the meeting on June 17-18. Traders valued in the expectation that the rates would remain unchanged, but look at the update of the summary of economic forecasts (SEP).
- 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 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 Australian dollar.
| USD | EUR | GBP | JPy | BOOR | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -1.29% | -0.28% | -0.66% | -0.74% | 0.12% | 0.00% | -1.28% | |
| EUR | 1.29% | 1.01% | 0.61% | 0.54% | 1.45% | 1.29% | -0.00% | |
| GBP | 0.28% | -1.01% | -0.31% | -0.47% | 0.44% | 0.28% | -1.01% | |
| JPy | 0.66% | -0.61% | 0.31% | -0.07% | 0.74% | 0.61% | -0.74% | |
| BOOR | 0.74% | -0.54% | 0.47% | 0.07% | 0.86% | 0.75% | -0.54% | |
| Aud | -0.12% | -1.45% | -0.44% | -0.74% | -0.86% | -0.15% | -1.43% | |
| NZD | 0.00% | -1.29% | -0.28% | -0.61% | -0.75% | 0.15% | -1.28% | |
| CHF | 1.28% | 0.00% | 1.01% | 0.74% | 0.54% | 1.43% | 1.28% |
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).
Technical perspectives: EUR/USD floats below 1.1550 as a return of the American dollar
EUR/USD uptrend remains in place because the pair printed another series of higher levels and higher low levels. In addition, the momentum remains, as indicated by the relative force indicator (RSI), which remains above its neutral level 50, despite the target down.
After saying, the first resistance on EUR/USD is 1.1550. The violation of the latter will reveal the 1.16 and annual peak (YTD) of 1,1631. After exceeding 1.17 is next. And vice versa, if EUR/USD stays below 1.1550, expect a withdrawal in the direction of 1.15. After cleaning, the next stop would be 1.1450, followed by a 20-day straight movable average (SMA) at 1.1386.
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 escalate 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 eternal 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.
