- EUR/USD trades on a weaker note for the fourth consecutive day near 1.0730 on Tuesday.
- The US Manufacturing PMI climbed to 50.3 in March against 47.8 in the previous reading, better than expected.
- ECB’s Stournaras said it could cut rates by a total of 100 basis points this year.
The EUR/USD pair remains under selling pressure, reaching nearly weekly lows of 1.0730 on Tuesday during the early Asian trading hours. The uptick of the US Dollar Index (DXY) above the 105.00 mark and higher US Treasury bond yields weigh on the major pair. Many Federal Reserve (Fed) officials, including Michelle Bowman, Loretta Mester, John Williams, and Mary Daly are set to speak later on Tuesday.
The US manufacturing activity in March has entered an expansion phase for the first time in nearly 18 months with increased production and new orders, according to the Institute for Supply Management (ISM) on Monday. The Manufacturing PMI climbed to 50.3 in March from 47.8 in the previous reading, above the market consensus of 48.4. The US Dollar gains traction following the upbeat US Manufacturing PMI. Investors have priced in nearly 61% odds of the Fed cutting rates by 25 basis points (bps) in June, up from 55.2 before the data release, according to the CME FedWatch Tool.
Across the pond, the European Central Bank (ECB) Governing Council member Robert Holzmann said on Saturday that the central bank could lower its key interest rate before the US Fed. Additionally, the ECB policymaker Yannis Stournaras stated that the ECB could possibly cut rates by a total of 100 basis points this year, but there is still no consensus on that. Stournaras said last week that the central had no reason to wait for the Fed to cut rates first. The dovish comments from the ECB policymakers exert some selling pressure on the Euro (EUR) and act as a headwind for the EUR/USD pair.
Market players will watch the HCOB manufacturing PMI for Spain, Italy, France, Germany, and the Eurozone. The preliminary Eurozone Harmonized Index of Consumer Prices (HICP) for March will be closely watched by traders on Wednesday. On Friday, attention will shift to US Nonfarm Payrolls.
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