Vasilis Tsaprounis
Independent Analyst
The single European currency continues to defend the 1,08 level which was challenged several times during the day yesterday and although some prices were marginally marked slightly below it, the euro still holds levels above it.
Yesterday's rich agenda did not give any big surprise and although some announcements had a slight deviation from estimates in general the data were mixed on both sides of the Atlantic without significantly affecting the exchange rate.
The prospect of a cut in key interest rates from Fed and ECB continues to be the main catalyst that is set to influence the path of the exchange rate in the near future.
Bets remain unchanged which are centered around the possibility of two rate cuts by both main Ccentral Banks but today's Fed meeting and especially the President's Jerome Poweell speech is likely to feed the markets with new data and bets could change.
Without any major surprise the US dollar could maintain a slight lead against the European currency as the interest rate differential in favor of the dollar remains on the table and the gap is difficult to close in the coming months.
But in any case the European currency recalls relatively often its ability to react which it maintains in the game with very good fidelity.
Today's very rich agenda in addition to the Fed meeting and President Powell speech which is sure will monopolize the interest, also fills from several interesting macroeconomic data such as consumer inflation in the eurozone area and the next preliminary data on the labor sector in the United States.
I remain on hold giving slightly higher odds that the 1,08 level will eventually break down.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
EUR/USD holds steady above 1.0800 after Eurozone inflation data
EUR/USD continues to move sideways above 1.0800 in European trading on Wednesday. The data from Eurozone showed that the annual HICP inflation held steady at 2.9%, helping the Euro hold its ground. Market focus now shifts to US data and Fed policy announcements.
USD/JPY extends sell-off to 150.00 on BoJ's hawkish hike
After spiking toward 154.00 in a knee-jerk reaction to the Bank of Japan's (BoJ) unexpected 15 bps rate hike, USD/JPY remains offered toward 150.00, with the sell-off intensified after Governor Ueda said that they will keep raising rates and adjust the degree of easing.
Gold price gains on Middle East tensions, focus is on Fed policy
Gold price (XAU/USD) exhibits a strong performance in Wednesday’s European session, with investors focusing on the Federal Reserve’s (Fed) monetary policy outcome later the day.
Solana price eyes rally as US SEC says SOL is not a security
Solana price faces a pullback by the weekly resistance and as of Wednesday, trades slightly higher by 0.88% at $181.13. On-chain data shows that SOL's daily active addresses are rising, signaling greater blockchain usage.
FOMC preview: Growing confidence of a Fed rate cut in September
US data should give officials more confidence that inflation is heading to 2% and we suspect attention will start focusing on achieving a ‘soft landing’ for the economy. This week’s FOMC meeting should lay the groundwork for a September rate cut.