- EUR/USD rose to around 1.0450 during Friday’s early European session, adding 0.30% on the day.
- Trump has announced that he will demand lower interest rates.
- The ECB is expected to cut the deposit rate on January 30.
The EUR/USD pair attracted some buyers towards the 1.0450 level during the early Asian session on Friday, boosted by a weakening US dollar (USD). The flash reading of the HCOB Purchasing Managers Index (PMI) for January for the euro zone and Germany will be published later on Friday. In the case of the United States, the flash S&P PMI for January will take center stage.
US President Donald Trump’s statements made at the World Economic Forum in Davos cause the value of the dollar to fall against the basket of major currencies. Late Thursday, Trump said he wanted interest rates to fall immediately and they should similarly fall around the world.
“It looks like markets are more concerned about interest rate cuts and any major signs that there are more to come,” said David Eng, an investment adviser at Sonora Wealth Group in Vancouver.
On the other hand, recent comments from European Central Bank (ECB) policymakers indicated that an interest rate cut was likely. ECB The head of the Croatian central bank, Boris Vujcic, said earlier this week that market expectations for ECB interest rate cuts are reasonable and risks to the inflation outlook are broadly balanced.
Meanwhile, ECB President Christine Lagarde stressed on Wednesday that the central bank was “not overly concerned” about the risk of inflation from abroad and would continue to gradually cut interest rates. Markets have priced in almost a 96% chance that the ECB will cut rates at the upcoming meeting.
