Vasilis Tsaprounis
Independent Analyst
The single European currency continues to trade near 1,1150 level with some exctensions on either side, raising concerns that the compression the pair has been under lately will soon dissipate, perhaps with some sharp jump to one side or the other.
And yesterday has enough interest but without major surprises, with the overall picture of the market remaining the same.
Οnce again the mild upward trend of the European currency is under challenged with the consequence that the Euro lost ground, all the gains of Thursday's were erased and Friday's opening found the American currency in a slightly better position.
Although there is some distance from the next Fed and ECB meetings, bets on the intentions of further reduction of interest rates continue to monopolize the interest and influence the course of the exchange rate.
Although the gap in the difference in interest rates has narrowed after the latest reduction of 50 basis points by Fed, the difference remains in favor of the American currency, and along with the concern about the course of the European economy remains at the moment the two main weights in the effort of the European currency to move much higher approaching the levels of 1.14 - 1.15, which in my view may be the higher prices that the European currency could achieve until the end of 2024.
Today's agenda is quite rich in announcements with several inflation data from eurozone countries being announced while US Personal Consumption Expenditure index stands out which is Fed's favorite indicator as it acts as a harbinger of inflation data.
If the data surprises, could be lead to resurgence in betting on the prospects for further rate cuts from the Fed, which will certainly weigh on the exchange rate and possibly help it break out of the tight range of recent days.
The behavior of the market partially confirmed my thoughts as I have already mentioned the desire to buy the US currency at some peak but so far I have failed to find the right entry point.
I will maintain the same thoughts, temporarily staying on hold watching the possibility of a fresh peak for the US Dollar buying prospect.
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