- EUR/USD drops after a short-lived pullback from 1.0800 ahead of a data-packed US economic calendar.
- The USD Index rises as market sentiment turns downbeat ahead of the US opening after an extended weekend.
- Eurozone preliminary inflation data will guide market expectations for the ECB rate cuts in June.
The EUR/USD pair falls after a pullback move to near the round-level resistance of 1.0800 in the late London session. The major currency pair faces pressure as investors turn cautious ahead of a data-packed week.
The market sentiment appears to be risk-off as risk-sensitive currencies are down. S&P 500 futures have surrendered almost entire gains posted in the European session ahead of opening after a long weekend due to Good Friday. The US Dollar Index (DXY) advances to 104.65 amid uncertainty ahead of the crucial United States Nonfarm Payrolls (NFP) report for March, scheduled for Friday.
Before the US NFP, investors will focus on the March US Manufacturing PMI report, which will be published at 14:00 GMT. The factory data is estimated to have increased to 48.4 from 47.8 in February but will remain below the 50.0 threshold.
The US Dollar rises even though market expectations for the Federal Reserve (Fed) pivoting to rate cuts from the June policy meeting have increased. According to the CME FedWatch tool, traders are pricing in a 65% chance that the Fed will trim interest rates in June.
The likelihood of a rate cut has increased after US core Personal Consumption Expenditure Inflation (PCE) data for February softened as expected. The monthly and annual core PCE inflation grew by 0.3% and 2.8%, respectively. Also, Fed Chair Jerome Powell said after the release of the US core PCE report that the latest US inflation data was "along the lines of what we would like to see.”
On the Eurozone front, investors await the preliminary inflation data for March, which will be released on Wednesday. The annual core inflation is expected to have decelerated to 3.0% from 3.1% in February. The annual Harmonized Index of Consumer Prices (HICP) is forecasted to have risen at a steady pace of 2.6%. Easing price pressures would accelerate investors’ prospects for the European Central Bank (ECB), kickstarting the rate-cut cycle from the June meeting.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD stabilizes near 1.0550, looks to post weekly gains
EUR/USD continues to fluctuate in a tight channel at around 1.0550 in the American session on Friday as trading action remains subdued with US financial markets heading into the weekend early. The pair looks to end the week in positive territory.
GBP/USD loses traction, retreats below 1.2700
After climbing to its highest level in over two weeks at 1.2750, GBP/USD reverses direction and declines to the 1.2700 area on Friday. In the absence of fundamental drivers, investors refrain from taking large positions. Nevertheless, the pair looks to snap an eight-week losing streak.
Gold pulls away from daily highs, holds near $2,650
Gold retreats from the daily high it set above $2,660 but manages to stay afloat in positive territory at around $2,650, with the benchmark 10-year US Treasury bond yield losing more than 1% on the day. Despite Friday's rebound, XAU/USD is set to register losses for the week.
Bitcoin attempts for the $100K mark
Bitcoin (BTC) price extends its recovery and nears the $100K mark on Friday after facing a healthy correction this week. Ethereum (ETH) and Ripple (XRP) closed above their key resistance levels, indicating a rally in the upcoming days.
Eurozone PMI sounds the alarm about growth once more
The composite PMI dropped from 50 to 48.1, once more stressing growth concerns for the eurozone. Hard data has actually come in better than expected recently – so ahead of the December meeting, the ECB has to figure out whether this is the PMI crying wolf or whether it should take this signal seriously. We think it’s the latter.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.