- Euro drifts lower, weighed by risk aversion.
- Fears of the escalation in the conflict in the Middle East support the American dollar.
- EUR/USD moves in a tiny triangle formula around 1.1550.
EUR/USD couple It trades with marginal losses, on Tuesday through the 1.1500 range on Tuesday. They were in debt hopes for a truce in the Middle East Risk appetiteBut the market volatility remains concluded to the extent that investors are waiting for a lot of decisions regarding monetary policy, including the Federal Reserve (FED) this week.
Israel and Iran are still exchanging fire for the fifth day, and US President Donald Trump called citizens to evacuate Tehran before he left the G7 summit to meet the National Security Council. Fears that the US can get involved in conflict have increased risk aversion.
Nevertheless, market movements have remained narrow so far, and investors are looking for a side of retail sales in the US, which were later shown on Tuesday, and the result of the Fed monetary policy meeting on Wednesday.
It is widely expected that the American central bank will leave rates, but investors will be particularly careful for the summary of economic forecasts and potential differences in the dot chart to assess the interest path rates In the near future.
Euro price today
The table below shows the percentage change in the euro (EUR) in relation to the main currencies. The euro was the strongest against the British pound.
| USD | EUR | GBP | JPy | BOOR | Aud | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.04% | 0.19% | 0.04% | -0.01% | -0.13% | -0.24% | -0.15% | |
| EUR | -0.04% | 0.12% | 0.03% | -0.07% | -0.14% | -0.20% | -0.21% | |
| GBP | -0.19% | -0.12% | -0.16% | -0.19% | -0.26% | -0.36% | -0.33% | |
| JPy | -0.04% | -0.03% | 0.16% | -0.06% | -0.17% | -0.27% | -0.21% | |
| BOOR | 0.00% | 0.07% | 0.19% | 0.06% | -0.19% | -0.15% | -0.14% | |
| Aud | 0.13% | 0.14% | 0.26% | 0.17% | 0.19% | -0.07% | -0.07% | |
| NZD | 0.24% | 0.20% | 0.36% | 0.27% | 0.15% | 0.07% | -0.00% | |
| CHF | 0.15% | 0.21% | 0.33% | 0.21% | 0.14% | 0.07% | 0.00% |
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: American Dollar regains its secure status
- Trump’s derivatives from the G7 summit increased the fears that the US could get involved in the conflict of Israel-Iran. The news crushed the appetite of investors at risk and provided the support of the American dollar at a higher demand for secure assets.
- Israel and Iran continued to replace the missiles earlier. Iran swore to start his greatest rocket attack in history in Israel, while Israel’s prime minister Benjamin Netanyahu threatened to kill the highest leader of Iran, Ali Chamenei. In the meantime, Trump’s call to Tehran’s citizens to leave the city fueled concerns about the earnest escalation of the conflict.
- The market reaction was reluctant to risk, but so far with narrow variability. Traders are in waiting and seeing mode, waiting for the FED interest rate later. The American dollar indicator (DXY), which measures the value of USD in relation to the basket of most often rotary currencies, moves just above the level 98.00, near many years of minima last week.
- The German economic mood indicator has improved over expectations, rising to 47.5 in June from 26.2 in May, exceeding the market forecasts of reading 35.0. However, the data did not provide any significant support of the euro.
- Currently, the main emphasis will be on the US retail sales data, which should demonstrate a significant 0.7% contraction in May after an augment of 0.1% in April, showing further evidence of the negative impact of tariff turbulence in the US economy.
- The most essential event of the week will be the decision of the Federal Reserve Monetary Policy on Wednesday. The bank will most likely leave its gate interest rate unchanged in the current range 4.25% -4.5%, but investors will look for changes in interest rate forecasts, which indicated two further rate discounts this year and growth and inflation forecasts.
- American data published on Monday revealed a rapid deterioration of the NY FED production indicator, which dropped to a read -16 in June, compared to the expectations of moderate improvement to -5.5 from -9.2 in May.
Technical analysis: EUR/USD Creating a tiny triangle around 1.1550
EUR/USD Last week, it is increasingly moving, since reaching a peak above 1.1600, creating a tiny triangle. Technical research says that this is a pattern of continuation, which is suggested by a stubborn result.
The Triangle Mountain, currently around 1.1600, will probably keep the bulls before the high on June 12 to 1.1630. Above here, the psychological level of 1,1700 may attract sellers. The measured target of the triangle pattern is 1.1750.
On the other hand, the bottom of the triangle is 1.1525 before the lowest level 13 June at around 1.1490. The stubborn trend below will be questioned and the pressure increased in the direction of 1.1370 (June 6 and 10).
FAQ in American dollars
The American dollar (USD) is the official currency of the United States of America and the “de facto” currency of a significant number of other countries where it is in circulation with local notes. It is most often a commercial currency in the world, which is over 88% of all global currency turnover, i.e. an average of $ 6.6 trillion of transactions per day, according to the data from 2022. After the Second World War, USD took over from the British pound as the reserve currency of the world. For most of its history, the American dollar was supported by gold, up to the Bretton Woods agreement in 1971, when the golden standard disappeared.
The most essential single factor affecting the value of the American dollar is the monetary policy, which is shaped by the Federal Reserve (FED). The Fed has two seats: achieving price stability (control inflation) and supporting full employment. Its main tool to achieve these two goals is to adjust interest rates. When the prices rise too quickly and inflation is above 2% of the Fed target, the FED will augment the rates, which helps USD values. When inflation drops below 2% or the unemployment rate is too high, the Fed may reduce interest rates that are weighing in the green area.
In extreme situations, the Federal Reserve can also print more dollars and introduce quantitative alleviation (QE). QE is a process in which the Fed significantly increases the credit flow in the detained financial system. It is a non -standard policy measure used in the event of a loan dehydrated, because the banks will not borrow (for fear of the contractor). This is the last last, when just lowering interest rates is unlikely to achieve the necessary result. The weapon of choosing the Fed was a FED weapon to combat the credit crisis, which took place during the great financial crisis in 2008. This includes FED printing more dollars and using them to buy US government bonds mainly from financial institutions. QE usually leads to a weaker American dollar.
Quantitative twist (QT) is the opposite process in which the federal reserve stops buying bonds from financial institutions and does not reinvest from the bonds that it has in novel purchases. This is usually positive for the American dollar.
