- EUR/USD moves sideways ahead of key events from both economies.
- Eurozone GDP figures are forecasted to be unchanged in the fourth quarter of 2023.
- US Nonfarm Payrolls are expected to print a reading of 200K against 353K prior.
EUR/USD consolidates after retracing its intraday gains, facing difficulties in extending the winning streak that began on March 1. Market participants are eagerly anticipating key events from both economies, including the Eurozone's Gross Domestic Product (GDP) data and Nonfarm Payrolls from the United States (US). Amidst this anticipation, the EUR/USD pair hovers around 1.0950 during the Asian trading hours on Friday.
The seasonally adjusted Eurozone GDP is forecasted to remain the same at 0.1% annually and flat at 0.0% monthly for the fourth quarter of 2023. Across the pond, US Nonfarm Payrolls could print a 200K figure for new jobs created in February, against 353K prior, which could reinforce the market expectation of Federal Reserve’s (Fed) Chair rate cut in June. Furthermore, the CME FedWatch Tool suggests a 56.7% likelihood of a cut in June.
On Thursday, the European Central Bank (ECB) opted to maintain its current monetary policy, affirming its commitment to steering inflation back into its desired range. The ECB retained the interest rates on the main refinancing operations, marginal lending facility, and deposit facility unchanged at 4.5%, 4.75%, and 4.0%, respectively. The central bank stated its intention to sustain appropriately restrictive policy measures for as long as required to achieve its inflation target.
During his second day of testimony before the US Congress, the Federal Reserve (Fed) Chair Jerome Powell hinted at the possibility of interest rate cuts occurring sometime this year. Furthermore, Cleveland Fed President Loretta Mester, speaking at the Virtual European Economics and Financial Center, expressed apprehension regarding the potential persistence of inflation throughout the year. Mester suggested that if economic conditions align with forecasts, there may be a probability of rate cuts later in the year.
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